Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[nrd525]

There might be an increase in holding. Though it'd be hard to prove. I know I'm holding more.

[TERA]

In order for the price to rally the following needs to occur:

[?] BTC are bought on exchanges
[?] BTC are bought offline in private transactions
[?] BTC are held by people who decide to become long term investors or are not in a position to sell
[?] BTC are purchased in merchandise/services from merchants who hold the BTC as a long term investment rather than selling on exchanges
[?] BTC are lost or are already lost

All of these need to add up to whatever the current markep cap in BTC is (13,000,000 etc)

Even though there are many ways in which each bitcoin can be 'covered', it is still the bitcoin which is the important unit of value here, and all of the above options need to add up to a specific number in bitcoins, NOT in dollars. The U.S.D. or whatever quote currency is used to purchase bitcoins on exchanges is not relevant here.  It is true that , over time, less btc are covered by exchange trades and more btc are covered via the other options. However, it is not at the same rate and not nearly at the same rate as the price is changing. There is no direct or indirect proportion to the dollar. The price and the dollar is totally irrelevant.

[seleme]

Guess lot of people withdrawing coins from Stamp emptied their hot wallet. Lat 7.67 btc I initiated to withdraw is taking almost an hour still waiting to be processed.

[Mayuyu48]

$628, good price for buying
buy and hold more, i believe something big will happen
cheap BTC in stamp, and rarely event when we see stamp and btc-e price are same

[ChartBuddy]

Explanation

[JorgeStolfi]

Your assumption is not too unlikely, but with bitcoin we have no option for high speed trades between exchanges, except if they were conducted over an interchanging platform off-blockchain.

Bitcoin arbitrage is meh, the transaction time is slightly too slow to allow consistently efficient arbitrage.

One does not need to move funds in real time between exchanges to do arbitrage.  Or maybe not at all.

An arbitrage opportunity occurs whenever someone posts a bid at one exchange A that is higher than the lowest sell at the other exhange B (or someone posts a sell at B lower than a bid  at A).  At that moment, an arbitrager at A, if he became aware of that situation before other clients, can sell into that bid, while his collaborator at B (need not be the same person) buys into that ask.  Both traders will then profit, relative to the mean bid-ask price that will result from their actions.  These trades are internal to the exchange, and therefore instantaneous - they do not appear in the blockchain at all.

In fact, one could view arbitrage as two people trading, each within one exchange, with the usual "buy low, sell high" rule.  The difference is that, by knowing the other exchange's order book before other clients, each trader can, in a sense, peek into the immediate the future - he gets a hint as to whether the price at his exchange is currently "low" or "high", relative to the mean price that the arbitragers themselves are about to fix.

With those hints, both traders can consistently "buy low, sell high" and keep increasing the total vaue of their accounts.   It does not matter whether price is in an increasing or decreasing trend, or varying randomly within a band; as long as the bids and asks get posted independently at each exchange, these occasions are likely to happen.

[aminorex]

I can't help but notice that this occurs in conjunction with the bitstamp behaviour.  Someone doesn't want the tape to paint?

[TERA]

What's with all the people who bought at $660? The trend was clearly breaking at $460. Why didn't you buy then? You should be up 40% right now and still be up 25% even at the bottom of the upcoming correction.  Instead I hear all these sob stories "oh no I bought at $660 after the 50% increase. How am I going to live through the correction in the mid 500s? Woe is me."

[aminorex]

[...woefully incomplete enumeration of factors which can contribute to a rising price omitted...]

All of these need to add up to whatever the current markep cap in BTC is (13,000,000 etc)[sic]

Absolutely not.  The amount of fiat burned is not equal to the market cap, ever.

[edwardspitz]

What's with all the people who bought at $660? The trend was clearly breaking at $460. Why didn't you buy then? Instead I hear all these sob stories "oh no I bought at $660 after the 50% increase. How am I going to live through the correction in the mid 500s? Woe is me."

They clearly expected it to go to $666  

[rjp55]

What's with all the people who bought at $660? The trend was clearly breaking at $460. Why didn't you buy then? You should be up 40% right now and still be up 25% even at the bottom of the upcoming correction.  Instead I hear all these sob stories "oh no I bought at $660 after the 50% increase. How am I going to live through the correction in the mid 500s? Woe is me."

All you do is sob.

[TERA]

All you do is sob.

How is this sobbing?

[seleme]

What's with all the people who bought at $660? The trend was clearly breaking at $460. Why didn't you buy then? You should be up 40% right now and still be up 25% even at the bottom of the upcoming correction.  Instead I hear all these sob stories "oh no I bought at $660 after the 50% increase. How am I going to live through the correction in the mid 500s? Woe is me."

Why do you excluding they bought before? Many were buying and selling at pivot points during the rise. 660-670 was the one and it looked we might go higher numerous times we were at that level.

[aminorex]

i.e. If someone has 100 BTC on Stamp and 100 BTC on Bitfinex, and a pile of USD on both, why not take advantage of times like these to take advantage of the cheap BTC on Stamp by switching to 150 BTC on Stamp, and 50 BTC on Bitfinex. Doing so would give the trader the same amount of BTC, but more Fiat. There must be people in Bitcoin who are set up in this way. Anyone with a considerable stake in Bitcoin must infact be set up this way.

That's only valid in flat market which Bitcoin rarely is.

If you are in bull market than you don't give a shit about arbitrage and fiat, and if you're in bear market than you don't give a shit about arbitrage and bitcoins.

My night to be disagreeable I guess.  I contend that it is not only valid in a flat market.  An arbitrage strategy can be robust against trends.  You can do the arb continuously in that case, even while you participate in the trend by taking a view.  In fact, it is wise to do so, because it creates a portfolio effect.
 

[seleme]

All you do is sob.

How is this sobbing?

How it is not?

[JorgeStolfi]

Still on that topic, an exchange owner can profit at his clients' expense, even without arbitrage, if there is a delay of a second or two between the submission of orders by clients and the display of those orders in the public order book and trade log.

Suppose that, at some moment,  the highest bid is 400 USD and the lowest ask is 500 USD.  Client A submits an order to sell 1 BTC at 420 USD.  One second later, client B, who still has not seen A's order, submits an order to buy 1 BTC at 480 USD.  The exchange operator notices the overlapping orders, and then inserts his own orders, with fake times, between those of A and B: first a buy into A's offer at 420, then a sell order at 480, which is then taken by B.   When those transactions finally appear in the trade log, both clients think that they were lucky to get their orders immediately filled; when in fact the operator took from B the 60 USD that he would have saved without his intervention.

(Why invest in bitcoin, if one can make millions *now* by opening a bitcoin exchange -- even a zero-fee one?  )

[seleme]

i.e. If someone has 100 BTC on Stamp and 100 BTC on Bitfinex, and a pile of USD on both, why not take advantage of times like these to take advantage of the cheap BTC on Stamp by switching to 150 BTC on Stamp, and 50 BTC on Bitfinex. Doing so would give the trader the same amount of BTC, but more Fiat. There must be people in Bitcoin who are set up in this way. Anyone with a considerable stake in Bitcoin must infact be set up this way.

That's only valid in flat market which Bitcoin rarely is.

If you are in bull market than you don't give a shit about arbitrage and fiat, and if you're in bear market than you don't give a shit about arbitrage and bitcoins.

My night to be disagreeable I guess.  I contend that it is not only valid in a flat market.  An arbitrage strategy can be robust against trends.  You can do the arb continuously in that case, even while you participate in the trend by taking a view.  In fact, it is wise to do so, because it creates a portfolio effect.
 

Whatever makes you happy. I personally think it's pretty stupid to be in fiat at any time during big pumps unless you sell in front of resistance to be on safe side and rebuy when it's broken. Otherwise you're just losing big gains while hunting small arbitrage opportunity.

Similar with btc in bear markets.

[ChartBuddy]

Explanation

[TERA]

All you do is sob.

How is this sobbing?

How it is not?

sobbing implies that I am sad. I'm not. I'm just being an ass.

[aminorex]

Still on that topic, an exchange owner can profit at his clients' expense, even without arbitrage...

One of MANY ways.  In an unregulated environment, it's a printing press for bitcoin.  I've seen orders taken away from the top of the book, for example.  Hey, it was a tender.  They can't really complain if someone fills their tender, can they?  Great way to monetize liquidity.  Also teaches a lesson to the wall fakers.  Would be totally illegal in U.S. exchanges, however.