r0ach's Cryptomarkets Watch & Scamcoin Observer

[TPTB_need_war]

4)  Market cap is determined by market makers and market makers plan to raise the price.  People don't build 100 million dollar mining facilities and then let the price be determined by sheer luck or fate.

The mining profit will come from increasing transaction fees × transaction volume. The problem is that increasing the block size too much will lower the fees. This is why this has been such a contentious issue. The mining cartel in China wants to make sure they can set the block size to maximize that multiplicative product. Why do others not able to deduce what is so obvious to me  

Bitcoin's volatility makes that entirely insignificant. Bitcoin can't be a currency until it has an economy where it is the unit-of-account. Well it actually has one, that is Bitcoin is the unit-of-account of the crypto gambling economy.

This is more important than you may realize. The Chinese are trying to trade their BTC for ETH, so they can control Ethereum when it goes Proof-of-Stake in Casper. So they can control the block sizes so they can maximize the transaction fees × transaction volume multiplicative product. Realize the Chinese want to control that multiplicative product for all major CCs. They will control the #1 PoW coin Bitcoin and the #1 PoS coin Ethereum. They control Bitcoin via ASIC mining and Ethereum by owning a majority of the ETH.

This is another reason ETH will rise again after BTC peaks at $500:

Btw, I think a double-top for ETH at $15 is likely. Too much bad news has come out, sentiment is negative, and I had always said it would bounce at $7. There needs to be a GPU mineable alternative to Bitcoin, same as the role Litecoin provided. It doesn't matter that ETH has no adoption. It is purely a store-of-value arbitrage/speculation proposition.

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[r0ach]

We already knew they were going to attempt a greater fool pump of Eth after the BTC halving rise.  The only question is, will anyone actually buy it?

[r0ach]

This shakeout was completely pointless.  They're trying to get rid of the longs but they're just going to pile back in anyway:

Some morons in China trying to run the stops before pumping it atm.  The little Chinaman games get so old.

[darlidada]

This shakeout was completely pointless.  They're trying to get rid of the longs but they're just going to pile back in anyway:

Some morons in China trying to run the stops before pumping it atm.  The little Chinaman games get so old.

Remember BTS? Many shorts prevented the rally to expand as you predicted. I know you made money out of it but this time, tell us asap when you give up on BTC too. Anyway, BTC is still in its puberty phase ; and during the LTC halving, the price crashed. So, I appreciate the diversity of opinion here but i wont get attached to the idea : rally = BIG RISE IN PRICE

@TPTB: Isn't gambling on alts very risky long term since BTC could crash anytime ? I'm always scared into putting money in ETH or XMR because while I see them increasing in BTC price at certain times, they could also decline in term of USD... I missed the latest XMR rally because of that. I saw it coming but I thought : yeah it can go x2 but btc could go down to 150...

The lack of timeline in the fall of BTC makes me miss alot of profit !!!

[TPTB_need_war]

@TPTB: Isn't gambling on alts very risky long term since BTC could crash anytime ? I'm always scared into putting money in ETH or XMR because while I see them increasing in BTC price at certain times, they could also decline in term of USD... I missed the latest XMR rally because of that. I saw it coming but I thought : yeah it can go x2 but btc could go down to 150...

The only speculators who are consistently winning on altcoins are those who buy/mine them when they are worthless, and then selling them when they get pumped.

Long-term if you believe a particular altcoin has a feature set and adoption direction that will drive it to compete with Bitcoin, then perhaps you can justify a long-term holding and just ignore the gut wrenching volatility.

I believe perhaps the Chinese felt Ethereum would be a major coin and thus I believe they have thrown BTC at it. And I think many people mined ETH because it can be mined with a GPU, thus there are many people willing to evangelize it. So it was a self-fulfilling bubble because so many people got interested in it. I do believe it will end up like Litecoin and BTS did, because fundamentally AFAICS it doesn't add anything realistic that is a huge market. But it might be good for another move up to perhaps a double-top before we are done. Right now is maximum pessimism because Vitalik admitted he sold 25%. And Homestead hype is already released. But there is still the hype coming before the release of Casper (if we haven't preempted it with the Ethereum Paradox thread, but I doubt we have that power here in this obscure forum).

Right now all the CCs have to be analyzed in terms of what speculators want to buy and mine. The speculators are like a hive of bees and they move from one arbitrage to the next, not only on price but also on mining hash functions, etc.. There is a lot of game theory to analyze in this speculation ecosystem comprising Bitcoin and the altcoins.

I don't really know what to advise you. I would not short BTC. I am not that confident of a crash.

What I am doing is moving to cash USA dollars (because upside on speculation is limited to perhaps a 100% gain and I am more interested in preservation of capital for the moment and the US dollar should give me solid 30 - 50% gains if I hold to late 2017) and I want to buy an altcoin very cheap later this year or early 2017 to aim for 10 to 1000X long-term gain (not a pump). I think you can guess which altcoin I would want to buy because I would have the most confidence in my own role as a lead dev.

The lack of timeline in the fall of BTC makes me miss alot of profit !!!

It is easy to convince ourselves of the profit we would have made, because we ignore all the wrong speculations we would have also made. In retrospect our performance is perfect, lol.

@TPTB: I have a theory regarding ETH. We all thought wallstreets would wake up to BTC at some point and they would end up buying it from us. We all thought we were front running them. What if Wallstreet has another strategy ? they back coins such as ETH, and use their enormous positions to pump the price to agitate greed inside us so we give them our rare btcs for their unlimited eth ?

Excellent! Yeah the game theory is complex.

[balu2]

... still waiting ... apart from LittleVern dumping cryptsy-leftovers not much is raining down ...

[Spoetnik]

... still waiting ... apart from LittleVern dumping cryptsy-leftovers not much is raining down ...

It's coming.. i see dumping at the end of the month here now as i always predicted every month
but BTC is still rising higher & higher regardless..

When we get closer to the halving we will see more & more guys chanting what we knew long ago.
They will be late to them game frantically trying to dump their shitcoin as they tank in favor of BTC.

EDIT:
i look forward to seeing the exodus from the digital pyramid scheme scam token called ETH  

[TPTB_need_war]

Fed hikes, Bitcoin down. As I told you would happen, that the speculation markets fear rising interest rates, so initially there will be a contagion as in 2008:

https://www.cryptocoinsnews.com/bitcoin-price-awaits-fed-rates-call/

The larger contagion is still to come. We may make another push towards $500 after end of the month.

[r0ach]

Fed hikes, Bitcoin down. As I told you would happen, that the speculation markets fear rising interest rates, so initially there will be a contagion as in 2008:

https://www.cryptocoinsnews.com/bitcoin-price-awaits-fed-rates-call/

The larger contagion is still to come. We may make another push towards $500 after end of the month.

For the 5000th time, you cannot correlate some Armstrong wild guess about gold with Bitcoin.  The halving dwarfs any miniscule change in interest rates and Armstrong has no chance of being accurate when the economy will go down in a black swan event.  You are putting all your eggs in one basket believing this guy, thinking there's going to be some kind of orderly walk to the exits in a long, drawn out process in the disintegration of the economy and gambling on the idea that a black swan event can't or won't happen.  It's called a "black swan event" because people like that guy have 0 chance of predicting when it occurs.

The economy is not made of rational actors that you can model in a computer program.  Someone like George Soros and Buffet could tag team short a single stock at any time just to amuse themselves and cause some kind of domino effect that brings everything down.  Armstrong, nor anyone else on the planet, can predict what different billionaire whales are going to do that all have the power to single handedly cause a 2008 event or worse at any second of the day.  The way the monetary system is structured, there is actually zero reason at all to believe the economy will go down in anything but a black swan event.

This is what is going to happen to you:

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I also believe, due to the phrase I've used a million times, "cascading deflationary collapse of fractional reserve fiat" (from defaults) that the economy will go down to a black swan event and not some years long drawn out process.  Satoshi is not going to call you on the phone and say, "hey man, the inverse relationship of stocks and interest rates is doing whatever the fuck, so you now have a nice safe time to buy Bitcoin around the bottom over the next 180 days".  This is just not going to happen.  

You're just going to turn on the TV and see bank holidays and you either own Bitcoin then or you don't.  Armstrong will be lucky if he even gets anywhere near the correct year for it.  If it doesn't go down by black swan, it will be from controlled demolition and still not adhere to anything on his schedule.

You want to know what the rise of Bitcoin will look like during this?  It will be just like when the price went from $230 to $500.  You'll see the price start to spike up a little and say, "hmm, think I'll wait for it to drop back down then buy some", but nope, this is the insiders buying.  There is no drop, the big financial catastrophe hits, and you're staring at the screen saying, "I made 7000 posts on the Bitcoin forum, the price is now $100,000 and I own 0".

[Spoetnik]

He comes up with a different reasons why there is dumping at the end of every month (for years) LOL

I have said endlessly i think they key to it is giant massive mining farms.

I have to lecture the shit out of people to pull their head out of their ass as they mouth me off..
Any time i have brought up my monthly dumping theory i get lipped off and laughed at
guys start roaring laughing saying people do not need to "pay bills"

W
R
O
N
G

I have read a bunch of interviews with guys that run large mining operations in China, USA, Iceland etc
and ALL OF THEM said the same damn thing !

All of them have HUGE loans that need repaid and all of them have massive expenses to cover.
So.. WHEN ..do you cover them ?
Sooner or later you HAVE to sell Bitcoin or your mining operation will have to close.
It's as simple as that.
And the laughing little shits sitting on an exchange Troll-Box's with 4 Bitcorn's invested in scams are the real joke.
Snotty little kids with Bitcoin lunch money are *almost* meaningless to the grand scheme of things.

Basically i don't think it takes much to swing the market in a new direction.
There is always a lot of day traders waiting for the momentum to swing the other way.
They are looking for "Signs" to act..
So when some monthly dumpers unload to pay bills etc they pile on adding more momentum.
Which i think is temporary.
This is an interruption on a monthly basis to the overall big picture.
The dumping momentum will fade and it will rebound back again.. EVER MONTH !
I have watched it do it like clock work since BTC was $50 a coin.
Nothing has changed.
It's so predictable i have always waited to sell on LocalBitcoins etc and gotten more.

Which is another point too.. RANSOMWARE


The largest part of the entire Bitcoin economy is Ransomware makers, thieves, hackers and organized crime.
Ransomware makers pull in i heard last year 325 million a year in Bitcoin.
A hell of a lot of that is going to get dumped.
And when do you want to dump them ?
DUH !
You wait until it looks like you are going to get the most for your BTC.
So there is large BTC holders waiting to cash out when the price is high.

I don't think this is complicated stuff.
All you have to do is look around and pay attention to what is going on.
Most greedy idiot day traders have their heads shoved up their ass though.
They think the world revolves around them and they are the big experts.
They are the loudest of all the guys i just talked about too and yet have the least amount of pull in the economy.

It's hard to get kids with 6 Bitcoin to remember that guys like Paul or Mark are spring loaded to dump.
You think the ex-BTC foundation Leader simply saved his 800k yearly salary ? or did he need Fiat ?

Re: Bitcoin Foundation: Where on Earth Did all the Money Go?

April 05, 2015, 08:22:39 AM
About Bitcoin Foundation: Who is Lindsay Holland w/ $160k salary - $13k/month

Yesterday, I was speaking about the Bitcoin Foundation BANKRUPTCY and I’ve found in the page 8 of this pdf the name of Lindsay Holland (https://bitcoin4.bitcoinfoundation.org/static/2014/05/Bitcoin-2013-990-PDC.pdf) and on the net we don’t have information about her.

Anyone have any information about her?

How about Lindsay ? You think she cashed out her Bitcoin ?

DUMPERS GONNA DUMP

..at least until the day Wallmart starts accepting Bitcoin when buying Cheese & Socks.

[smooth]

The largest part of the entire Bitcoin economy is Ransomware makers, thieves, hackers and organized crime.
Ransomware makers pull in i heard last year 325 million a year in Bitcoin.
A hell of a lot of that is going to get dumped.

This is completely, utterly and 100% wrong. While all ransomware coins may or may not be dumped (I would agree most are), virtually 100% of ransomware coins need to be bought by the people paying the ransom. So it has no possible negative effect on the market. Overall it is slightly positive because of the necessary holding period during the ransoming process, or might (however unlikely) be more positive if ransomware operators keep some of the BTC.

[kiklo]

The largest part of the entire Bitcoin economy is Ransomware makers, thieves, hackers and organized crime.
Ransomware makers pull in i heard last year 325 million a year in Bitcoin.
A hell of a lot of that is going to get dumped.

This is completely, utterly and 100% wrong. While all ransomware coins may or may not be dumped (I would agree most are), virtually 100% of ransomware coins need to be bought by the people paying the ransom. So it has no possible negative effect on the market. Overall it is slightly positive because of the necessary holding period during the ransoming process, or might (however unlikely) be more positive if ransomware operators keep some of the BTC.

Hmm,
Smooth , you are right that the # of BTC is unaffected by the ransomware utility.

However Spoetnik is right there will be a negative price effect from it.

Example: Ransomware 3BTC, (Poloniex Exchange order book)
Victim buys 3 BTC from active sell list
starts at $437.76 and buys all of the way up to $439.06 raising the price.
Sends BTC to badguy
Badguy needs Fiat right now so sells into the buys orders
Starts at $436 and pushes the price down to $432
(Because even through it is the same amount of BTC, the sell walls are currently stronger per wall than the buy walls.)
(Because the miners have to sell BTC to pay bills as Spoetnik pointed out and the badguys are not going to want to hold it too long as it might be seized if left sitting on an exchange.)

Rinse & repeat a few hundred times and you can really lower the price by decreasing buy support.
By the way , once BTC does becomes very popular with resellers , expect to see this effect when resellers accept BTC , but immediately cash out into fiat to avoid the prices swings. Price will lower until the utility use causes a semi-permanent stabilization effect which will minimize the price fluctuations and a equilibrium is reached , then its price will increase as use increases with no further drops, until another coin takes it's market share and replaces it.

 

FYI:
You can spend your BTC at Walmart, you just have to convert it to a Gift Card 1st.  
https://www.gyft.com/buy-gift-cards/  

Edit:

Kiklo, you are wrong in practice. As the buys take orders off the book, market makers will move up their bids to maintain a target spread.

Target spread can only be maintained once utility creates enough demand to match the growing supply,
The past few days prove that at some point the buyers refused to go any higher which is why BTC did not hit $500 and stalled at ~$470 before dropping below $445.

[smooth]

Kikko, you are wrong in practice. As the buys take orders off the book, market makers will move up their bids to maintain a target spread.

There is indeed a small effective fee paid to market makers by any liquidity takers (plus of course exchange fees) but these are absolutely negligible in the case the ongoing trickle of ransomware trades. Liquidity becomes a significant issue in practice when some whale wants to load up large amounts of BTC or when a trader puts on a 10-1 or 50-1 margin position of similar size.

I've personally traded amounts orders of magnitude larger than nearly all ransomware deals and I can tell you even at that scale it is not hard to not move the market significantly.

once BTC does becomes very popular with resellers , expect to see this effect when resellers accept BTC , but immediately cash out into fiat to avoid the prices swings. Price will lower

This indeed started to happen in 2014 as retailers signed on. The reason it was probably a negative net impact on the price is that Bitcoin early adopters were using retail as a way to cash out. Essentially nobody ever bought Bitcoin in order to spend them at retailers, as essentially all ransomware victims do. So it was a completely different situation.

Over the past year retail adoption has probably been negative, so maybe that is a small positive for Bitcoin price, but this probably reverses actual causality. Retail adoption has been negative because Bitcoin early adopters have spent all they want to spend on retail, so order volumes dried up and retailers said fuck it.

[Spoetnik]

@smooth
I was mainly trying to add in the Ransomware aspect to my rant for context.
As in, it is a *part* of the over all picture of "BIG MONEY" players
So i never gave them dumping too much thought at all really.. nor was that my "main" point.

You did post an interesting comment though (while 100% ignoring everything else i said)
And i may still be right anyway.

You see smooth people that are a victim will go buy a smaller'ish amount.
The collector may very will dump his "Collection" in a far larger amount.

The Ransomware makers -DO- have the ability to dump LARGE amounts .. AT ONCE !
Those victims buying them are not buying them at once.

This can absolutely indeed have a large effect -combined- with the other factors i just mentioned.
If i had to guess i would safely bet that Ransomware coders are dumping a LOT !
Why would they risk holding Bitcoin when the price could tank
..or they could get arrested and lose them.
Never mind they probably want coke, hookers, a mansion.. Lambo's and your not buying those with BTC.
They probably want to obfuscate their trail and are probably working on improving their systems.
This is not a scenario where you simply collect up Millions of dollars in bitcoin and let them sit in a wallet.
..not with the FBI etc sniffing around.

@smooth you might have legit point *if*
The Ransomware dumpers did their dumping in -equal- amounts as the victims forced to BUY the Bitcoin.
Get it ?
So the hypothetical victim is forced to go and BUY say '4' Bitcoins
So is the Ransomware coder going to go and SELL those 4 Bitcoins as soon as he got them ?
I highly doubt that !
Chances are he has a pool of victims and the BTC is flowing in at different names.
What i would do is wait until it looks like a good time dump *some* of them.
And chances are those Bigger whales (legal or not) out there seen what i have all along
and noticed a monthly pattern of price increases and decreases..
and of course would *try* and aim their dumping at a profitable point time to do so.
AKA: Common Sense.

EDIT:
@kiklo
Interesting reply for sure !

[r0ach]

I don't know what you guys are smoking but any type of economic activity is good for a currency.  It doesn't matter if it's the girl scouts or ransomware.  I don't believe the ransomware market is anywhere near that big though.  I'd be surprised if it was 1/10th of that.

[smooth]

I don't know what you guys are smoking but any type of economic activity is good for a currency.  It doesn't matter if it's the girl scouts or ransomware.  I don't believe the ransomware market is anywhere near that big though.  I'd be surprised if it was 1/10th of that.

You guys?

I said it was (probably small) positive due to the holding period (i.e. activity). Ransomware operators might keep some BTC too, though I doubt it is much. No one other than speculators wants BTC; everyone who uses it just seems to treat it like a hot potato.

I don't think the size estimate on the ransomware market was outrageous. That's actually a small number for something having the visible footprint of ransomware.

[TPTB_need_war]

This is what is going to happen to you:

I believe you will learn a very important lesson soon.

Remember the Chinese miners are highly leveraged fiat debt queens.

Manufacturing in China is a 0 profit activity. Read Michael Pettis.

Ransomware operators might keep some BTC too, though I doubt it is much. No one other than speculators wants BTC; everyone who uses it just seems to treat it like a hot potato.

That is why I have said the only economy where Bitcoin is the unit-of-account is the crypto gambling market.

That is why I am going to attempt to create a new microtransactions economy for CC with my JAMBOX wherein the users do not cash out and their unit-of-account are the Jambits or Jamcash. The distinction from GetGems will be there will be actual use cases that drive the users to do these microtransactions. Also I intend to solve all the scaling and centralization problems of Bitcoin, by employing my clever modification to Satoshi's proof-of-work by employing unprofitable mining with a perpetual tail block reward. The math is irrefutable, that Bitcoin's spendable supply will asymptotically trend to 0 due to lost coins. Monero and Jambits will both trend to constant spendable supply due to the tail reward. The difference is Jambits' mining will be unprofitable and mined by the millions of users. I will explain in a white paper why this will remove the tendency to centralize mining and why it will circulate the coin from the power-law savers to the spenders in a virtuous cycle that is necessary otherwise unions and socialism forms to do that job.

[r0ach]

Remember the Chinese miners are highly leveraged fiat debt queens.

And they're in an emerging market with tremendous growth potential, while everyone else on the planet is also in the same enormous fiat debt, except their debt is in something not productive.  When the cascading defaults occur in the global economy, it will create a black swan event.  So much of the digital fiat will instantly vaporize that the system will no longer function and you have instant bank holidays while BTC keeps trucking on as usual.  Then, of course, the demand for Bitcoin and metals goes through the roof and people will be buying houses with 1 btc.

The people who maxed out their credit cards on something that will actually be useful on the other side of this are probably the smartest people in the room when nobody is going to be paying back those debts anyway.  So what's your reply to this?  You think the Chinese miners are going to get squeezed so hard they have to dump everything?  They already dump everything lol.  There is no scenario where negative effects occur that affect BTC miners worse than the general public, in fact, it's quite the opposite.  They bought money printing machines with debts they don't have to pay back.

[TPTB_need_war]

Remember the Chinese miners are highly leveraged fiat debt queens.

And they're in an emerging market with tremendous growth potential, while everyone else on the planet is also in the same enormous fiat debt, except their debt is in something not productive.  When the cascading defaults occur in the global economy, it will create a black swan event.  So much of the digital fiat will instantly vaporize that the system will no longer function.  The people who maxed out their credit cards on something that will actually be useful on the other side of this are probably the smartest people in the room when nobody is going to be paying back those debts anyway.

It doesn't work that way in practice. Armstrong has explained that rest of the world will collapse first driving the USA dollar skyhigh, because the rest of the world was borrowing in dollars and pegging their currencies to dollars, thus the rest of the world is short the dollar. A massive short covering effect is coming. And thus the international capital will follow like ducks chasing the gains in the USA dollar and USA stock market. Causing a massive bubble while the rest of the world is collapsing.

When the dollar becomes too strong and the bubble reaches its apex, then the dollar will collapse and the world will end up in a monetary reset chaos 2018 - 2020.

So what's your reply to this?  You think the Chinese miners are going to get squeezed so hard they have to dump everything?  They already dump everything lol.

The large scale miners operating on debt. They will be forced to dump more Bitcoin as interest rates rise. Mining on low interest rate loans has been great.

[r0ach]

Your scenario doesn't make sense.  There's no reason for all these nations to be beholden to the US dollar and collapse while acting as indentured servants to the US.  They'll just abandon the dollar because the US can't fight every nation on the planet at the same time.  There will be major tariffs, major currency wars, capital controls, and things like Bitcoin would benefit in the process.  Even if the opposite happens, your supposed scenario of capital flight of everyone on the planet to the US would send Bitcoin to the moon alone.  Bitcoin wins big either way.  Your claimed scenario is even MORE bullish for Bitcoin than mine.

I think I've just proven why your attempt to correlate Bitcoin with Armstrong gold predictions fails completely.  You think everyone will want US assets and US dollars.  Bitcoin is the lowest friction method possible of getting money out of Timbuktu and into the US.