Downward trend imminent

[mobodick]

GLBSE users has been starting to get their coins back now, it'll be interesting to see if their action is what I predicted (sell their coins for cash). If they do sell, we should see low $11 quite soon, and it'll trigger another round of selling, that'll bring us to $10 and possibly below.

well here comes low $11, price will probably stabilize for a few days at this level, and then another leg down to $10s

I hope for a correction so i see it as cheap coins atm

Your best shot for cheap coins was when it went below $3 earlier this year. This down trend won't go much below $10, I would say $8 is the absolute bottom. Unless something really bad happens.

Hehe.,., there is cheap coin and there is cheap coin.
Agree with your assessment btw.
Maybe $8 is a bit too low but i think the max bottom is below $10.

[1715537775]

1715537775

[1715537775]

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[Vandroiy]

Your best shot for cheap coins was when it went below $3 earlier this year. This down trend won't go much below $10, I would say $8 is the absolute bottom. Unless something really bad happens.

Hehe.,., there is cheap coin and there is cheap coin.
Agree with your assessment btw.
Maybe $8 is a bit too low but i think the max bottom is below $10.

• Gox USD price never was below 3 USD this year.
• Wow @ predicting the peaks of Bitcoin price movement with accuracy on the order of 10%.

It's Bitcoin. IMO we could all be off by a factor and suddenly end up at 30 or 0.6, both numbers we've already seen in the last two years.

[mobodick]

Your best shot for cheap coins was when it went below $3 earlier this year. This down trend won't go much below $10, I would say $8 is the absolute bottom. Unless something really bad happens.

Hehe.,., there is cheap coin and there is cheap coin.
Agree with your assessment btw.
Maybe $8 is a bit too low but i think the max bottom is below $10.

• Gox USD price never was below 3 USD this year.
• Wow @ predicting the peaks of Bitcoin price movement with accuracy on the order of 10%.

It's Bitcoin. IMO we could all be off by a factor and suddenly end up at 30 or 0.6, both numbers we've already seen in the last two years.

Normally i would agree, but i have identified a systemic bottom to bitcoin.
see: https://bitcointalk.org/index.php?topic=113725.0

[runeks]

I highly doubt that we will see $5 coins again, ever. But that's just my humble opinion. Unless confidence in Bitcoin itself (the protocol, or the reference client's implementation of it) is impacted. I actually think $11 is quite low (current price is $11.06 as of this writing).

I'm planning on spending the rest of my Mt. Gox balance ($140) on $11 coins right now. But price seems to be dropping right now, so I might wait a bit.

EDIT: Just bought 12.84 BTC for $142.

Cut to price crashing to $8

[marcus_of_augustus]

It seems like the down into rising selling volume is becoming entrenched, with some relatively large sales going through on down slides.

It is indicative of saturation, i.e. the huge rate of inflation of bitcoin, currently ~25%, has finally caught up to what has actually been until now a phenomenal rate of adoption. It seems that the scheduled halving of bitcoin inflation rate in 5,000 blocks can not come a moment too soon, although it too is probably throwing uncertainty over the market.

But in the meantime I can see a powerful selling down, perhaps revisiting the hard floor at cost-of-production (around $4) but may go as low as $2.5 depending on how much pain the new ASIC miners can handle with their cost of capital for shiny new hardware, i.e. will they keep pumping bitcoins at a loss or rather buy at the market?

Anyway, look out below is my advice.

[kokojie]

It seems like the down into rising selling volume is becoming entrenched, with some relatively large sales going through on down slides.

It is indicative of saturation, i.e. the huge rate of inflation of bitcoin, currently ~25%, has finally caught up to what has actually been until now a phenomenal rate of adoption. It seems that the scheduled halving of bitcoin inflation rate in 5,000 blocks can not come a moment too soon, although it too is probably throwing uncertainty over the market.

But in the meantime I can see a powerful selling down, perhaps revisiting the hard floor at cost-of-production (around $4) but may go as low as $2.5 depending on how much pain the new ASIC miners can handle with their cost of capital for shiny new hardware, i.e. will they keep pumping bitcoins at a loss or rather buy at the market?

Anyway, look out below is my advice.

With ASIC, there is only very tiny cost of production, since the cost is mostly upfront. The cost of ongoing production is less than $1.00 per BTC, so the ASIC miners don't really lose money, they just take longer to break even, there's no reason for them to turn off their machine ever.

[steamboat]

It seems like the down into rising selling volume is becoming entrenched, with some relatively large sales going through on down slides.

It is indicative of saturation, i.e. the huge rate of inflation of bitcoin, currently ~25%, has finally caught up to what has actually been until now a phenomenal rate of adoption. It seems that the scheduled halving of bitcoin inflation rate in 5,000 blocks can not come a moment too soon, although it too is probably throwing uncertainty over the market.

But in the meantime I can see a powerful selling down, perhaps revisiting the hard floor at cost-of-production (around $4) but may go as low as $2.5 depending on how much pain the new ASIC miners can handle with their cost of capital for shiny new hardware, i.e. will they keep pumping bitcoins at a loss or rather buy at the market?

Anyway, look out below is my advice.

With ASIC, there is only very tiny cost of production, since the cost is mostly upfront. The cost of ongoing production is less than $1.00 per BTC, so the ASIC miners don't really lose money, they just take longer to break even, there's no reason for them to turn off their machine ever.

I keep seeing this sentiment all over the forums. the cost of ongoing production is less than $1.00 per BTC right now. That will change very quickly as more miners get ASIC. the switch to ASIC will be much the same as the switch from CPU to GPU. The deployment will take longer because miners don't have ASICs sitting in their computers already, but the amount of hashing power is going to explode. Remember, there are a finite # of blocks to be found. Think of it as an arms race. Yes, if you're the first person on the battlefield with a gattling gun, you're going to greatly increase the effectiveness of your army. But sooner or later (and in the case of ASIC, sooner) your enemy will get gattling guns too and the cost of war will go up.

[da2ce7]

I keep seeing this sentiment all over the forums. the cost of ongoing production is less than $1.00 per BTC right now. That will change very quickly as more miners get ASIC. the switch to ASIC will be much the same as the switch from CPU to GPU. The deployment will take longer because miners don't have ASICs sitting in their computers already, but the amount of hashing power is going to explode. Remember, there are a finite # of blocks to be found. Think of it as an arms race. Yes, if you're the first person on the battlefield with a gattling gun, you're going to greatly increase the effectiveness of your army. But sooner or later (and in the case of ASIC, sooner) your enemy will get gattling guns too and the cost of war will go up.

If there is a flood of ASIC bitcoin's trying to get sold.... well then this is going to be the best buying optionality you'll get in a long time... Wait-out with your cash sitting on the exchanges...  soon after the difficulty shoots right up.... start buying.

[Cluster2k]

I keep seeing this sentiment all over the forums. the cost of ongoing production is less than $1.00 per BTC right now.

If that's the cost of making a bitcoin then people are insane to buy them for $10+ right now.

Think of it as an arms race. Yes, if you're the first person on the battlefield with a gattling gun, you're going to greatly increase the effectiveness of your army. But sooner or later (and in the case of ASIC, sooner) your enemy will get gattling guns too and the cost of war will go up.

The first people with ASICs are going to make a killing.  Anyone receiving their ASIC a week or so later is going to spend many months paying it off.  The window for fat profits is literally only a few days before the hash rate skyrockets.  BFL sending orders out will be a true popcorn moment for bitcoin. 

Pressure to sell bitcoins to recover ASIC costs will be intense.  Graphics cards can be used for gaming, scientific computing or sold on eBay for someone else to do the same.  Bitcoin ASICs have only one use and it'll be a huge race to the bottom to recover costs.

[kokojie]

I keep seeing this sentiment all over the forums. the cost of ongoing production is less than $1.00 per BTC right now.

If that's the cost of making a bitcoin then people are insane to buy them for $10+ right now.

Think of it as an arms race. Yes, if you're the first person on the battlefield with a gattling gun, you're going to greatly increase the effectiveness of your army. But sooner or later (and in the case of ASIC, sooner) your enemy will get gattling guns too and the cost of war will go up.

The first people with ASICs are going to make a killing.  Anyone receiving their ASIC a week or so later is going to spend many months paying it off.  The window for fat profits is literally only a few days before the hash rate skyrockets.  BFL sending orders out will be a true popcorn moment for bitcoin.  

Pressure to sell bitcoins to recover ASIC costs will be intense.  Graphics cards can be used for gaming, scientific computing or sold on eBay for someone else to do the same.  Bitcoin ASICs have only one use and it'll be a huge race to the bottom to recover costs.

sub $1 is the cost to produce bitcoin once you have the equipment, but the initial investment is quite high, you have to estimate how long it will take to break even. I think most people will see 1-2 years as acceptable, though I think realistically we will be looking at 2-3 years once competition gets intense. At that time there would be another halving, so all bets are off again. I don't expect ASIC owners to really make that much money in the long run.

[crazy_rabbit]

I highly doubt that we will see $5 coins again, ever. But that's just my humble opinion. Unless confidence in Bitcoin itself (the protocol, or the reference client's implementation of it) is impacted. I actually think $11 is quite low (current price is $11.06 as of this writing).

I'm planning on spending the rest of my Mt. Gox balance ($140) on $11 coins right now. But price seems to be dropping right now, so I might wait a bit.

EDIT: Just bought 12.84 BTC for $142.

Cut to price crashing to $8

Edit: Price down to 10.6.

[ercolinux]

With ASIC, there is only very tiny cost of production, since the cost is mostly upfront. The cost of ongoing production is less than $1.00 per BTC, so the ASIC miners don't really lose money, they just take longer to break even, there's no reason for them to turn off their machine ever.

$1 for production cost is only for few countries: assuming a 7X in difficulty at the start of ASIC era I got a energy cost in the range $1,00-2.8 from USA to EU country. Plus the $1200-1600 (again price are different from country to country) of RIG to repay that charge another $2.5-$3 to the stat calculating a 1yr ROI and no more ASIC sold.
With ASIC production cost is the $3.5-6 range, but 8-9 is more realistic

[EuroTrash]

I just think that GLBSE turning out to be another scam* coming from a (ex-) highly trusted member of the community, has shattered the trust of many small-amount investors. Also the subsequent fingerpointing game is involving some admins and moderators, which in turn are losing their patience and banning long time members. All of this leaves some bitter feeling that will take some time to heal.

By "small-amount investors" I'm referring to the kind of computer-savvy type that understands how bitcoin works and would see in it a chance to make fast money due to fiat value of bitcoin increasing. Well, I expect most of the people in bitcoin world by now to be in for the chances of profit rather than for the anarchist/save-the world-from-the-evil-banking-system ideas.

So I think that those investors are giving up on their dreams of getting rich through bitcoin, and selling en-masse.
IMO this is just a blip in the life of bitcoin, but the price is mostly fuelled by mass psychology so there's still the risk of a chain reaction.

Also IMO this confidence crash is a good learning experience for the bitcoin community, because it creates awareness and helps preventing disasters of such a high magnitude from happening in the future.

* you can have different opinion on this - James still has a scammer tag 'tho.

[Ente]

I just think that GLBSE turning out to be another scam* coming from a (ex-) highly trusted member of the community, has shattered the trust of many small-amount investors. Also the subsequent fingerpointing game is involving some admins and moderators, which in turn are losing their patience and banning long time members. All of this leaves some bitter feeling that will take some time to heal.

By "small-amount investors" I'm referring to the kind of computer-savvy type that understands how bitcoin works and would see in it a chance to make fast money due to fiat value of bitcoin increasing. Well, I expect most of the people in bitcoin world by now to be in for the chances of profit rather than for the anarchist/save-the world-from-the-evil-banking-system ideas.

So I think that those investors are giving up on their dreams of getting rich through bitcoin, and selling en-masse.
IMO this is just a blip in the life of bitcoin, but the price is mostly fuelled by mass psychology so there's still the risk of a chain reaction.

Also IMO this confidence crash is a good learning experience for the bitcoin community, because it creates awareness and helps preventing disasters of such a high magnitude from happening in the future.

* you can have different opinion on this - James still has a scammer tag 'tho.

Lol
You make it sound as if BTC/USD was down 80% from one week before!
This is totally normal Bitcoin-behavior, those swings are just more rare than last year. Which is 98% pure speculation driven anyway. ..Which brings me to question your motives for your long post: FUD? How many $ are waiting on your Gox? :-P

Ente

/enjoying rollercoaster

[EuroTrash]

This is totally normal Bitcoin-behavior, those swings are just more rare than last year. Which is 98% pure speculation driven anyway. ..Which brings me to question your motives for your long post: FUD? How many $ are waiting on your Gox? :-P

FUD, not really. Just contributing my analysis to the discussion, maybe it is valuable to someone

In fairness I'm skinned for cash this month so I can't invest in more bitcoins. In my situation, it is in my personal interest for bitcoins to skyrocket not plunge. And as I wrote, I'm confident this is just a blip.

Still, 10% of USD value lost in two weeks is a considerable amount, depending on the scale of your investment, of course.

[giszmo]

This is totally normal Bitcoin-behavior, those swings are just more rare than last year. Which is 98% pure speculation driven anyway. ..Which brings me to question your motives for your long post: FUD? How many $ are waiting on your Gox? :-P

FUD, not really. Just contributing my analysis to the discussion, maybe it is valuable to someone

In fairness I'm skinned for cash this month so I can't invest in more bitcoins. In my situation, it is in my personal interest for bitcoins to skyrocket not plunge. And as I wrote, I'm confident this is just a blip.

Still, 10% of USD value lost in two weeks is a considerable amount, depending on the scale of your investment, of course.

Last year the daily movement was 10-20%. At least in my memory. Kind of helps digesting "blips".

[runeks]

It seems like the down into rising selling volume is becoming entrenched, with some relatively large sales going through on down slides.

It is indicative of saturation, i.e. the huge rate of inflation of bitcoin, currently ~25%, has finally caught up to what has actually been until now a phenomenal rate of adoption. It seems that the scheduled halving of bitcoin inflation rate in 5,000 blocks can not come a moment too soon, although it too is probably throwing uncertainty over the market.

But in the meantime I can see a powerful selling down, perhaps revisiting the hard floor at cost-of-production (around $4) but may go as low as $2.5 depending on how much pain the new ASIC miners can handle with their cost of capital for shiny new hardware, i.e. will they keep pumping bitcoins at a loss or rather buy at the market?

Anyway, look out below is my advice.

Wanna bet?

I have a very hard time imagining even $5 coins. 10 BTC escrowed bet that the price won't reach $4 within the next 6 months?

[ElectricMucus]

It seems like the down into rising selling volume is becoming entrenched, with some relatively large sales going through on down slides.

It is indicative of saturation, i.e. the huge rate of inflation of bitcoin, currently ~25%, has finally caught up to what has actually been until now a phenomenal rate of adoption. It seems that the scheduled halving of bitcoin inflation rate in 5,000 blocks can not come a moment too soon, although it too is probably throwing uncertainty over the market.

But in the meantime I can see a powerful selling down, perhaps revisiting the hard floor at cost-of-production (around $4) but may go as low as $2.5 depending on how much pain the new ASIC miners can handle with their cost of capital for shiny new hardware, i.e. will they keep pumping bitcoins at a loss or rather buy at the market?

Anyway, look out below is my advice.

Wanna bet?

I have a very hard time imagining even $5 coins. 10 BTC escrowed bet that the price won't reach $4 within the next 6 months?

That's easy. (No I won't bet though)
If you consider the possibility that all three ASIC mining companies turn out to be scams there is even a straight-forward explanation for such a scenario. In that case even sub-dollar prices might be possible.

If they deliver I don't think we will go below ~5 however.

[damnek]

Wanna bet?

I have a very hard time imagining even $5 coins. 10 BTC escrowed bet that the price won't reach $4 within the next 6 months?

That's easy. (No I won't bet though)
If you consider the possibility that all three ASIC mining companies turn out to be scams there is even a straight-forward explanation for such a scenario. In that case even sub-dollar prices might be possible.

If they deliver I don't think we will go below ~5 however.

You may be right but the logic behind this is beyond me. But more price swings have disagreed with my reasoning I have to admit.

[molecular]

If you consider the possibility that all three ASIC mining companies turn out to be scams there is even a straight-forward explanation for such a scenario. In that case even sub-dollar prices might be possible.

Care to explain why all 3 turning out scams would move the rate down that drastically (or at all for that matter)?