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Question: What is the number of people who bought coins at an average above $70 and failed to sell at a profit.
less than 5000
5000 - 10000
10000 - 20000
20000 - 50000
50000 - 100000
100000 - 500000
over 500000

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Author Topic: [poll] Estimate how many took noticeable losses  (Read 2101 times)
Photonfrog
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April 12, 2013, 05:31:28 PM
 #1

Ok, I'm barely out of the newbie stage on these forums but I have not yet seen this matter discussed so here is a poll for crowd sourcing some kind of estimate.

What I hear about bubbles in general is that they have two powerful negative effects on the market:

1: Lots of negative press and ambient negativity.
2: Painful experience which scares buyers away from future involvement.

There are surely further effects beyond these but I'm no expert in the matter so I'll ignore such details.

If I look at my own surroundings I personally know six people who have joined the Bitcoin system. Out of the 6 there is one who bought in above 70, four of them bought in at an average between 20 and 65 and the last one still has his fiat stuck in transit from the bank towards the exchange.

If this poll manages to aggregate a decent guesstimate for the number of hurt individuals we might get an idea about how long it will take to replace all of them with new people. To do this we'll also need to know some other data points such as changes of market growth and purchasing power but that can be done elsewhere.

Cheers!

EDIT: If you feel like it, please describe briefly how you calculated your estimate. It would be enlightening information. :-)

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BitCrawler
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April 12, 2013, 05:36:50 PM
 #2

I don't think anyone really knows how many people took losses.. This poll is not going to help us with that.
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April 12, 2013, 05:39:38 PM
 #3

I don't think anyone really knows how many people took losses.. This poll is not going to help us with that.

+1 no one really knows anything.

we all have the same information data, charts and live feeds
that's pretty much it.

siggy
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April 12, 2013, 05:40:44 PM
 #4

Speaking from personal experience ..  I lost not a single BTC during the past couple days.   I even just double checked both my cold storage and hot wallets..  they're all still there.

Sigg
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April 12, 2013, 05:44:07 PM
 #5

I last sold at $18, so I took no losses. Tongue
Photonfrog
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April 12, 2013, 05:48:27 PM
 #6

I don't think anyone really knows how many people took losses.. This poll is not going to help us with that.

But is there not plenty of indicators we could use to get a hunch?

1: We should know the speed of the mtgox queue processing.
- only ~3k processed since yesterday, altho its been a strange day

2: mtgox claims: "We now have roughly 20,000 new accounts created each day."
- I guess this last datapoint relates to the three or so days running up to the crash.

3: We should know the average time delay for transffering funds from fiat to placing bids on mtgox. (3 days?)

4: mtgox claims: "The number of new account opened went from 60k for March alone to 75k new account created for the first few days of April!"

5: mtgox sits on 80% of the market.
- We can ignore the remaining 20% for this particular estimate.

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anarchomedia
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April 12, 2013, 05:53:20 PM
 #7

The current price was an all time high just a month ago.  Anyone who bought in over that month and especially the last 2 weeks will be feeling very sore but I doubt there are that many who did compared to the whole bitcoin community that has been growing steadily for more than 4 years.  They were mostly newbies too I think.  

We will suffer some bad PR for sometime though regardless of how many actually lost their shirt.
Photonfrog
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April 12, 2013, 05:54:12 PM
 #8

Speaking from personal experience ..  I lost not a single BTC during the past couple days.   I even just double checked both my cold storage and hot wallets..  they're all still there.

Sigg

If everyone behaved like this we'd be in the "less than 5000" category :-)

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Beta-coiner1
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April 12, 2013, 05:57:30 PM
 #9

I didn't sell or trade,just holding...If 75-80 is considered a low and more than twice the 2011 high I think it is obvious we're we are going.It makes me wonder if this is the new 5-8 pricing.  Tongue

Photonfrog
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April 12, 2013, 06:00:08 PM
 #10

The current price was an all time high just a month ago.  Anyone who bought in over that month and especially the last 2 weeks will be feeling very sore but I doubt there are that many who did compared to the whole bitcoin community that has been growing steadily for more than 4 years.  They were mostly newbies too I think.  

We will suffer some bad PR for sometime though regardless of how many actually lost their shirt.

Actually this current price (about 75 usd) was an all time high about 15 days ago. That's even half a month...

Compare this with the housing bubble that popped in my home town around 1994, that bubble popped down to what was an all time high perhaps a decade back in time. If you got 10 years of bubble growth to sucker in the market for experiencing the losses you got quite a different case than when you got a couple of weeks. But we live in different times...

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April 12, 2013, 06:00:23 PM
 #11

I have bought some coins for higher than the crash low. But since I did not sell, I have incurred no losses.

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April 12, 2013, 06:09:15 PM
 #12

Would't have lost a penny if my order to sell everything went trough at the first minute of that fu..ing lag. MtGox, i am looking at you.



Photonfrog
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April 12, 2013, 06:13:58 PM
 #13

The graph at: http://blockchain.info/charts/n-unique-addresses
Shows us that the total number of wallets which have had transactions during a single day peaks at about 100k. Now I have no idea if the transactions which result from a trade at mtgox is witten to the blockchain but i would guess that it is. (occams razor argument)

If we take this chart to its biggest extreme we can integrate the number of wallets and consider each of them to represent a single individual. If this was the case we would find roughly 1M people involved with trades over the last 15 days.

If every wallet which has been involved in any trade within the blockchain the last 15 days represent a person who has payed more than 70 usd on average for bitcoins and also failed to sell them at a profit then we would be looking at a total of 1M punished individuals.

Now if we filter this hypothesis through some sort of reality we might get closer to a decent estimate. ^^

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April 12, 2013, 06:31:17 PM
 #14

If this poll manages to aggregate a decent guesstimate for the number of hurt individuals we might get an idea about how long it will take to replace all of them with new people.

Your question is aiming at an irrelevancy. Bitcoin is a success at any price, as long as people use it to pay for goods and services. Bitcoins were not made for speculation. When bitcoin stabilizes, we no longer need many speculators. Speculators are mainly needed as long as there are idiots in the market, because they collect the money from them and put it to better use.

Looking only at the number of idiots misses the point.

No matter how many, the good speculators, those who buy low and sell high and thereby stabilize the price, always win and stay. Bubbles like the current one are like rainstorms, cleaning the sky.

We will have such speculative price bubbles as long as enough idiots come into this market. This is generally not entirely bad for a juvenile, emerging market. It raises the market capitalization, because it brings in fresh money. This enables the efficient speculators to stabilize the market better.
essem
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April 12, 2013, 06:40:40 PM
 #15



Can't we get a rough idea from market cap at peak - current market cap?
Photonfrog
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April 12, 2013, 06:51:12 PM
 #16

If this poll manages to aggregate a decent guesstimate for the number of hurt individuals we might get an idea about how long it will take to replace all of them with new people.

Your question is aiming at an irrelevancy.

Is it really irrelevant?

I'll have to defend its relevancy somehow as we are currently looking at speculating about the consequences of a burst bubble.

Consider the case that there was only one single individual who bought all of the "profitless" bitcoins and then this person failed to sell any of them at a profit. This hypothesis has a single loser and everyone else is a "winner". If this hypothesis was to be true (in our fantasy world) then the emotional consequences of a burst bubble should be close enough to zero to matter at all. In this case the system has in practice been sponsored towards greater success in the future.

In the opposit case we have a quite more significant emotional impact. Imagine the case that only one rich person had possession of all bitcoins except for those that were bought at more than 70 usd. Then this rich person is the only individual who manages to sell any coin at a profit during the bubble burst. In this case we have quite a significant emotional impact from the bubble and it will be quite a challenge to recover some semblance of faith in the bitcoin system as a whole. It would be really hard to consider bitcoin a viable technological innovation in the future.


Reality will be found somewhere between these extremes. It should however be leaning towards one or the other extremes and the impact should adjust with the position along this imaginary axis.

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Photonfrog
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April 12, 2013, 06:54:16 PM
 #17



Can't we get a rough idea from market cap at peak - current market cap?

Market cap at peak should be between 2 and 3 billion usd (260usd * 11M bitcoins).

Current market cap will be around 0.8 billion usd (77usd * 11M bitcoins)

This does not however reflect the actual value of the system, but I don't know if it can be calculated any other way...

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NY11giants
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April 12, 2013, 07:01:12 PM
 #18

If we knew the total number of active BTC holders, it would help too (in relation to the market cap). 

How many active BTC'ers are out there?  When I watch the trollbox on btc-e, there are so many screaming folks, and a lot of them surround
holdings of .5BTC or 20 LTC or ... you get the point.  While their activity can set the tone of the market, a sale at $40 shows up on the chart whether it was for .1 of a BTC or 100 BTC.  The real question is, how many BTC folks have holdings of 100, 500, 1000 and so??

Photonfrog
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April 12, 2013, 07:17:23 PM
 #19

If we knew the total number of active BTC holders, it would help too (in relation to the market cap). 

How many active BTC'ers are out there?  When I watch the trollbox on btc-e, there are so many screaming folks, and a lot of them surround
holdings of .5BTC or 20 LTC or ... you get the point.  While their activity can set the tone of the market, a sale at $40 shows up on the chart whether it was for .1 of a BTC or 100 BTC.  The real question is, how many BTC folks have holdings of 100, 500, 1000 and so??




I have seen a couple of fun graphs which try to plot wallet sizes against the number of wallets. I doubt their reliability though as they showed a cutoff with the top 1% of all wallets containing more than about 120 coins. And a totally huge number of wallets at less than 1 coin (more than half of all addresses from what I recall).

Perhaps someone knows more about digging these statistics up from the blockchain, i'll give it a try but I doubt i'll succeed.

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April 12, 2013, 07:32:22 PM
 #20

If this poll manages to aggregate a decent guesstimate for the number of hurt individuals we might get an idea about how long it will take to replace all of them with new people.

Your question is aiming at an irrelevancy. Bitcoin is a success at any price, as long as people use it to pay for goods and services. Bitcoins were not made for speculation. When bitcoin stabilizes, we no longer need many speculators. Speculators are mainly needed as long as there are idiots in the market, because they collect the money from them and put it to better use.

Looking only at the number of idiots misses the point.

No matter how many, the good speculators, those who buy low and sell high and thereby stabilize the price, always win and stay. Bubbles like the current one are like rainstorms, cleaning the sky.

We will have such speculative price bubbles as long as enough idiots come into this market. This is generally not entirely bad for a juvenile, emerging market. It raises the market capitalization, because it brings in fresh money. This enables the efficient speculators to stabilize the market better.

Well you've missed the point entirely... this is a question of consumer confidence.  The "Idiots" are funding your retirement...bitcoin isn't getting the majority of its value from its dedicated population of computer geeks (I use that term endearingly). Nobody is worried about the confidence of the bitcoin community here it is what this destabilization has done for consumer confidence in light of the boom that took place with the influx from Cyprus and the press surrounding it.   It's going to take a much longer time to replace the money lost because John Q. Public got burned on this one to satisfy the profits of the few.   

Don't get me wrong a correction was due but the compounded problem of MtGox not being able to handle their own traffic really shook bitcoin's public image.  You'll be feeling the ripples of this for probably months or even the next year as fresh money is much more unlikely to join in now.  There will be the same steady influx of miners and mining tech as long as the value stays above 60ish and the difficulty doesn't radically outpace it but we (as a community of investors, miners, etc) just shot ourselves in the foot with massive profit taking (which kicked this off) and a failure to address the forest as a whole vs the trees right in front of us (inadequate bandwidth/protection dedicated to preserving real $ investment).   

Lots of valuable lessons have been learned at the expense of John Q.'s pocket book and our own pocket books in many cases.  Hopefully we utilize those lessons going forward.
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