Bitcoin Forum
June 22, 2024, 05:13:03 PM *
News: Latest Bitcoin Core release: 27.0 [Torrent]
 
   Home   Help Search Login Register More  
Pages: [1] 2 »  All
  Print  
Author Topic: Speculation: Coinbase causing these massive peaks and dips.  (Read 6887 times)
gmiwenht (OP)
Member
**
Offline Offline

Activity: 115
Merit: 10


View Profile
February 17, 2013, 04:48:08 PM
Last edit: February 20, 2013, 04:12:28 PM by gmiwenht
 #1

This is my theory. For the first time, people are able to buy Bitcoin simply by linking their bank account. That means no need for Dwolla, Mt. Gox, etc. and hence no need to understand (or even know about) "the market". I think all this talk about panic sells, big players, reversals etc, is just speculators writing their own narratives. "Who would be so stupid as to buy/sell xxxx BTC at market price? It must be manipulation." The truth is, what we have is a live wire in a bathtub. People who don't know or care about markets want to cash in or cash out immediately, and Coinbase gives them the opportunity to do this, directly, from end to end, at the click of a button. I would bet a lot of people are not even aware that there is a "market".

And for what it may be worth, remember that all SR prices are pegged to the USD. Most users would have their SR interface displaying in USD with the BTC/USD conversion happening implicitly, and only affecting the customer at the checkout. If some "big player" (read: some random rich dude with money to burn) wants to buy a lot of drugs, all he has to do is buy BTC and then immediately part with it to get his products. Market prices do not affect his actions.

I think that all these crazy peaks and dips are natural consequences of increased activity in a (relatively) shallow market, and we should not read too much into them. We have been slowly drifting into a seismic zone -- if you can't handle the tremors, you should move somewhere else.

1xsBEUVzo6EtAST5Bq96AztiTR5mBXNzt
dancupid
Hero Member
*****
Offline Offline

Activity: 955
Merit: 1002



View Profile
February 17, 2013, 04:54:53 PM
 #2

This is my theory. For the first time, people are able to buy Bitcoin simply by linking their bank account. That means no need for Dwolla, Mt. Gox, etc. and hence no need to understand (or even know about) "the market". I think all this talk about panic sells, big players, reversals etc, is just speculators writing their own narratives. "Who would be so stupid as to buy/sell xxxx BTC at market price? It must be manipulation." The truth is, what we have is a live wire in a bathtub. People who don't know or care about markets want to cash in or cash out immediately, and Coinbase gives them the opportunity to do this, directly, from end to end, at the click of a button. I would be a lot of people are not even aware that there is a "market".

And for what it may be worth, remember that all SR prices are pegged to the USD. Most users would have their SR interface displaying in USD with the BTC/USD conversion happening implicitly, and only affecting the customer at the checkout. If some "big player" (read: some random rich dude with money to burn) wants to buy a lot of drugs, all he has to do is buy BTC and then immediately part with it to get his products. Market prices do not affect his actions.

I think that all these crazy peaks and dips are natural consequences of increased activity in a (relatively) shallow market, and we should not read too much into them. We have been slowly drifting into a seismic zone -- if you can't handle the tremors, you should move somewhere else.

Coinbase are doing $1 million per month - mtgox is doing more than this every day.
So no is the answer.
gmiwenht (OP)
Member
**
Offline Offline

Activity: 115
Merit: 10


View Profile
February 17, 2013, 05:04:21 PM
Last edit: February 17, 2013, 05:57:54 PM by gmiwenht
 #3

I want to offer a bit of follow-up speculation: the process as I outlined it is symmetric. That is, people are now able to both buy and sell with greater ease and increased ignorance. But let's consider the dynamics here: it is the customer who is buying BTC and it is the vendor who is receiving (and possibly selling) the BTC. It is far more likely that the vendor has a deeper understanding of Bitcoin economics than the customer. Thus, although the customer may simply buy at market price (driving the price high), and then immediately part with his BTC, the vendor is much more likely to either hold the BTC, or sell it off gradually (keeping the price stable).

SR is a prime example of this (since prices are pegged to the dollar), but I believe this asymmetry would apply to most emerging points of sale. Just like the high street shopper does not concern him or herself with foreign exchange rates while on a shopping spree abroad, while the owner of a high street retail chain probably has a good understanding of their market, currency rates and the economy in general.

So in conclusion, this supplier/consumer asymmetry will continue to facilitate an increasing number of uninformed BTC buys at market price by consumers. However we will not see a corresponding number of dumps because the suppliers receiving the BTC know better. As a result, the price will continue to climb.

1xsBEUVzo6EtAST5Bq96AztiTR5mBXNzt
redbeans2012
Hero Member
*****
Offline Offline

Activity: 887
Merit: 1000


View Profile
February 17, 2013, 05:24:57 PM
 #4

I was just about to post something like this. Right when coinbase began having problems the price kinda stopped going up..  I had 3 btc on there now it shows zero.  HM  Undecided
molecular
Donator
Legendary
*
Offline Offline

Activity: 2772
Merit: 1019



View Profile
February 17, 2013, 05:48:48 PM
 #5

excuse my ingorance, but what kind of problems is coinbase having?

PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
redbeans2012
Hero Member
*****
Offline Offline

Activity: 887
Merit: 1000


View Profile
February 17, 2013, 05:52:36 PM
 #6

excuse my ingorance, but what kind of problems is coinbase having?


Well i've noticed for the past few days alot of people were complaining that they couldn't buy bitcoins and that they were "out".  I haven't tried.  There was also a problem with  unconfirmed transactions with coinbase.  Not sure of the specifics but if you read their blog they made an update last night. 

Like I said my wallet of 3 bitcoins is empty this morning.  Hoping its just a glitch that is being fixed.  Undecided
redwraith
Full Member
***
Offline Offline

Activity: 188
Merit: 102



View Profile
February 17, 2013, 06:18:33 PM
 #7

Redbeans,

I also noticed that my meager supply of bitcoins at Coinbase now reads zero.  I suspect it may have something to do with their "big code update" Armstrong mentioned in his blog.  Neverthess, I sent an email just to be sure, 'cause it's a little alarming.
MEGAMERICAN
Newbie
*
Offline Offline

Activity: 20
Merit: 0


View Profile
February 17, 2013, 06:58:24 PM
 #8

Any pending transaction on Coinbase will not show up on the transaction page anymore. You have to click on "Buy/Sell Bitcoins" on the left hand side and then click on the transfer history tab. This has confused a lot of people, including myself.
redbeans2012
Hero Member
*****
Offline Offline

Activity: 887
Merit: 1000


View Profile
February 17, 2013, 07:01:27 PM
 #9

Redbeans,

I also noticed that my meager supply of bitcoins at Coinbase now reads zero.  I suspect it may have something to do with their "big code update" Armstrong mentioned in his blog.  Neverthess, I sent an email just to be sure, 'cause it's a little alarming.

Yes hopefully so.  My own fault though.  No matter how cool you think the company is, never leave too many bitcoins on their site.  My gut tells me that this is just part of the update but will be more cautious for now on.
notig
Sr. Member
****
Offline Offline

Activity: 294
Merit: 250


View Profile
February 17, 2013, 07:11:51 PM
 #10

If they are having problems it's probably because there was a huge new amount of interest.
cypherdoc
Legendary
*
Offline Offline

Activity: 1764
Merit: 1002



View Profile
February 17, 2013, 11:44:23 PM
 #11

http://blog.coinbase.com/post/43285532179/unconfirmed-transactions
Severian
Sr. Member
****
Offline Offline

Activity: 476
Merit: 250



View Profile
February 18, 2013, 12:59:07 AM
 #12

Coinbase reeks of scam, whether they mean to be one or not. They appear to prevent customers from buying as the price goes up and preventing customers from selling as the price drops. "Technical issues" as a method of CYA is the oldest trick in the book.

The price has certainly been dropping as they've interrupted the chain.
notme
Legendary
*
Offline Offline

Activity: 1904
Merit: 1002


View Profile
February 18, 2013, 02:38:23 AM
 #13

In order for coinbase to do the instant conversion they offer they have to actually have the funds on an exchange to trade immediately.  When there is a lot of demand in either direction they will have problems.  It is a systemic issue with the services they offer, but should improve as the build up their buffers.  Buying will have more problems then selling since fiat moves so slow.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
Herodes
Hero Member
*****
Offline Offline

Activity: 868
Merit: 1000


View Profile
February 18, 2013, 02:06:39 PM
 #14

Coinbase reeks of scam.

AFAIK, they're a serious buisiness, if you want to spread FUD, then please have some solid evidence to back it up with.
Severian
Sr. Member
****
Offline Offline

Activity: 476
Merit: 250



View Profile
February 18, 2013, 02:14:06 PM
 #15

AFAIK, they're a serious buisiness, if you want to spread FUD, then please have some solid evidence to back it up with.

Please quote the full sentence:

Quote
Coinbase reeks of scam, whether they mean to be one or not.

In any business, incompetence can become indistinguishable from a scam if the operators aren't careful.
Herodes
Hero Member
*****
Offline Offline

Activity: 868
Merit: 1000


View Profile
February 18, 2013, 02:50:38 PM
 #16

AFAIK, they're a serious buisiness, if you want to spread FUD, then please have some solid evidence to back it up with.

Please quote the full sentence:

Quote
Coinbase reeks of scam, whether they mean to be one or not.

In any business, incompetence can become indistinguishable from a scam if the operators aren't careful.

That's true. And I agree things like this should not happen, all features should be tested properly before put on a live system. But software systems are often complex, and errors can happen, it even has happened to NASA, so it happening to a small bitcoin entrepenor is not unheard of. But that being said, there should be very elaborate testing before pushing features live.
b!z
Legendary
*
Offline Offline

Activity: 1582
Merit: 1010



View Profile
February 20, 2013, 01:34:17 PM
 #17

Coinbase reeks of scam, whether they mean to be one or not. They appear to prevent customers from buying as the price goes up and preventing customers from selling as the price drops. "Technical issues" as a method of CYA is the oldest trick in the book.

The price has certainly been dropping as they've interrupted the chain.

I don't find this true at all.
lebing
Legendary
*
Offline Offline

Activity: 1288
Merit: 1000

Enabling the maximal migration


View Profile
February 21, 2013, 04:22:57 PM
 #18

Coinbase reeks of scam, whether they mean to be one or not. They appear to prevent customers from buying as the price goes up and preventing customers from selling as the price drops. "Technical issues" as a method of CYA is the oldest trick in the book.

The price has certainly been dropping as they've interrupted the chain.

They are silicon valley company, funded by noted investors. They are pretty much the furthest thing from a scam in all of bitcoinland.

Bro, do you even blockchain?
-E Voorhees
Severian
Sr. Member
****
Offline Offline

Activity: 476
Merit: 250



View Profile
February 21, 2013, 09:04:41 PM
 #19

They are silicon valley company, funded by noted investors. They are pretty much the furthest thing from a scam in all of bitcoinland.

I know who they are. I'm quite familiar with YC. Please read the full thought.

"Coinbase reeks of scam, whether they mean to be one or not."

My later reply to Herodes is still apropos:

"In any business, incompetence can become indistinguishable from a scam if the operators aren't careful."
piramida
Legendary
*
Offline Offline

Activity: 1176
Merit: 1010


Borsche


View Profile
February 21, 2013, 09:18:57 PM
 #20

Severian, did you actually use the site or your conclusions are based on hearsay? I have no problem buying when the price is stale, goes up, or goes down. There are some delays (up to several hours) when you try to withdraw the coins, and the reason for delay is explained in full technical detail. But the trading remains to be the most convenient and fast way to trade bitcoins, by a great margin.

They are a small company, yes, but they work hard and they sure do not look like scam - I've used most of bitcoin startups, and this one looks even a little more trustworthy than blockchain.info. So you better pick your words carefully or don't use them at all.

"interrupted the chain" What? Care to explain what you think you said there?

i am satoshi
Pages: [1] 2 »  All
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!