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

[exocytosis]

JorgeStolfi is the most sane, reasonable member on these forums.

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[inca]

correct, you told the fact! bitcoin is more likely going to $300 and lower

Sssh fallling.

Jorge how much of the VC money invested in bitcoin in the last 24 months originated in mainland china?
Why would otherwise sensible silicon valley venture capitalists invest so heavily in an ecosystem as small as bitcoin without evidence of user growth, or invest at all if 'the big fundamental fact' was bearish?

I think you will be blindsided for bitcoin moves out of the 'dark' and is gradually globally legitimised as a store of value and a transactional currency. You will probably change your mind when central banks like the PBOC change their stance to it in the coming years. Of course by then it will have moved up in price (and distribution) considerably.

[inca]

JorgeStolfi is the most sane, reasonable member on these forums.

I am still waiting for your prediction of prices to be sub 250 last month to come true.

[ChartBuddy]

Explanation

[exocytosis]

JorgeStolfi is the most sane, reasonable member on these forums.

I am still waiting for your prediction of prices to be sub 250 last month to come true.

I might have been wrong about minor short term price movements, but I've gotten the big picture right. I.e.: I understood that price, generally, would head down. That's not impressive though, since any sane observer could see it coming.

We saw a tiny DCB a couple of days ago. I think we might go sub 300 by the end of November though. Probably sub 250 by January. With quite a few DCB's along the way.

[noobtrader]

340 seem to be fair price atm

[DeadCoin]

In the context of an 11 month bear market we have rising btc adoption, rising transaction volumes, rising merchant integration and astonishing VC funding into bitcoin companies this year. Fundamentals seem pretty bullish to me.

There is no real data on BTC adoption.  Anyway it is obvious that the BTC price is due to speculation, not adoption.  Without speculation, the demand for payment use may not be enough to support 100 $/BTC.

The NUMBER of transactions is rising, but the daily transaction VOLUME IN USD is basically flat, somewhat down from January.  However, we do not know how much of that is actual payments (BTC changing hands).

Merchant integration means more merchants are accepting dollars or euros that come from the sale of bitcoins.  It gives more excuses for early adopters to sell their old coins.  I have yet to see evidence that it is attracting new users.

VC funding seems to be going mostly into service companies, like exchanges, fund management, and payment processors; not into bitcoin itself.  Most of those investors do hope that the price will recover, or at least stop falling, so that they get more customers; but they will make money even if the BTC price gradually goes to zero.  And some service companies (such as slightly dishonest investment funds) will make MORE money in this case.

The big fundamental fact in the last 11 months is strongly negative: the Chinese government has made bitcoin nearly useless in Mainland China.  Apparently, the Chinese speculators who drove the price from ~140$ to ~1200$ have been leaving the market, with some ups and downs, since last December.

A new bubble will require opening some new market, bigger than Mainland China was before de December decrees.  Will the COIN ETF do that?

It'd be in single digits, where it was before the media hype and speculative bubbles.

[inca]

JorgeStolfi is the most sane, reasonable member on these forums.

I am still waiting for your prediction of prices to be sub 250 last month to come true.

I might have been wrong about minor short term price movements, but I've gotten the big picture right. I.e.: I understood that price, generally, would head down. That's not impressive though, since any sane observer could see it coming.

We saw a tiny DCB a couple of days ago. I think we might go sub 300 by the end of November though. Probably sub 250 by January. With quite a few DCB's along the way.

I wasted five minutes of my life reviewing your entire post history last week. Big picture lol.

Edit: need i remind you that less than a year ago you were calling for 10 to 100k prices for bitcoin.

[octaft]

Why would otherwise sensible silicon valley venture capitalists invest so heavily in an ecosystem as small as bitcoin without evidence of user growth, or invest at all if 'the big fundamental fact' was bearish?

He answered your question in the very post you responded to. Bitcoin services can make money off fees regardless of the price. For that matter, investors are not infallible, and at the same time understand the potential for some of their investments to be flops. Can't hit a homer if you never swing.

[inca]

Why would otherwise sensible silicon valley venture capitalists invest so heavily in an ecosystem as small as bitcoin without evidence of user growth, or invest at all if 'the big fundamental fact' was bearish?

He answered your question in the very post you responded to. Bitcoin services can make money off fees regardless of the price. For that matter, investors are not infallible, and at the same time understand the potential for some of their investments to be flops. Can't hit a homer if you never swing.

VC investment is of the order of $400 million dollars in the last 24 months for a currency with a market cap of 5 billion dollars. That is massive investment compared to the size of the current userbase and economy. That is investment with expectation of growth. Frankly this place is becoming a doomer echo chamber.

[JorgeStolfi]

I respectfully disagree, we will not ever see 100 USD again, that is if we ever see it fall below - that would be the end of crypto. But this will not happen in a thousand years.

I do not know whether the price will go below 100$, but it is not impossible. 

The current price is basically the result of three major surges in demand:

(1) Jan-Apr 2013 (that increased the price by about +125$, from ~15$ to ~140);
(2) Oct-Nov 2013 (increased by about +660$, from ~140$ to ~800$), and
(3) June 2014 (about +150$, from ~450$ to ~650$).

The first two events left the price at ~800$ in Jan/2014.  From Feb to May the price fell by about -350$; the most likely cause is partial loss of the demand that caused bubble 2, the only one that seems large enough to cause such a drop.  That would explain also the continuing drop since Jun/2014 (by about -300$).

If bubble 2 (only) deflates completely, the price may fall to 275$.  A partial deflation of the other two bubbles would be enough to take the price below 100$.

I suspect that bubble 1 is Chinese too, but in the special economic zones, and perhaps with a different demographics from bubble 2.  I still don't have a clue about bubble 3, but I see signs that it may be deflating too.

[NotLambchop]

correct, you told the fact! bitcoin is more likely going to $300 and lower

Sssh fallling.

Jorge how much of the VC money invested in bitcoin in the last 24 months originated in mainland china?
Why would otherwise sensible silicon valley venture capitalists invest so heavily in an ecosystem as small as bitcoin without evidence of user growth, or invest at all if 'the big fundamental fact' was bearish? ...

If gambling was unprofitable, why would otherwise sensible people build casinos? 

[inca]

I respectfully disagree, we will not ever see 100 USD again, that is if we ever see it fall below - that would be the end of crypto. But this will not happen in a thousand years.

I do not know whether the price will go below 100$, but it is not impossible. 

The current price is basically the result of three major surges in demand:

(1) Jan-Apr 2013 (that increased the price by about +125$, from ~15$ to ~140);
(2) Oct-Nov 2013 (increased by about +660$, from ~140$ to ~800$), and
(3) June 2014 (about +150$, from ~450$ to ~650$).

The first two events left the price at ~800$ in Jan/2014.  From Feb to May the price fell by about -350$; the most likely cause is partial loss of the demand that caused bubble 2, the only one that seems large enough to cause such a drop.  That would explain also the continuing drop since Jun/2014 (by about -300$).

If bubble 2 (only) deflates completely, the price may fall to 275$.  A partial deflation of the other two bubbles would be enough to take the price below 100$.

I suspect that bubble 1 is Chinese too, but in the special economic zones, and perhaps with a different demographics from bubble 2.  I still don't have a clue about bubble 3, but I see signs that it may be deflating too.

These are mighty strange bubbles. They never fully deflate and keep blowing bigger and bigger!

[btcney]

The point is that most traders lose money. The forum is littered with people who sold early and wished they hadn't. There may be a very select few who have sold at near a peak and bought in much lower. It isn't the vast majority of the bearish posters on here who simply wish to buy at a low price. I would say buying at a third of the previous ATH is a decent entry.

This is what I was referring to.

Most "traders" lose money and yet all the perma bears in here knew it was a steal at $10 and recognised it was a bubble at $1000... lol

I held and made money last year but I got in well over $100 per btc, I also sold a bit early in December, but I did pretty well.

I have lost over $5000 this year so far

HAHAHAHA
Need to print those posts out.

[octaft]

Why would otherwise sensible silicon valley venture capitalists invest so heavily in an ecosystem as small as bitcoin without evidence of user growth, or invest at all if 'the big fundamental fact' was bearish?

He answered your question in the very post you responded to. Bitcoin services can make money off fees regardless of the price. For that matter, investors are not infallible, and at the same time understand the potential for some of their investments to be flops. Can't hit a homer if you never swing.

VC investment is of the order of $400 million dollars in the last 24 months for a currency with a market cap of 5 billion dollars. That is massive investment compared to the size of the current userbase and economy. That is investment with expectation of growth. Frankly this place is becoming a doomer echo chamber.

Don't be so dramatic. I'm not calling for doom, I'm just pointing out that A) charging fees for helping others transact in bitcoin is a much safer way for investors to profit and B) while investors never expect their investments to fail (or else why would they invest?), they are prepared for the possibility. That includes investments in bitcoin.

[inca]

Why would otherwise sensible silicon valley venture capitalists invest so heavily in an ecosystem as small as bitcoin without evidence of user growth, or invest at all if 'the big fundamental fact' was bearish?

He answered your question in the very post you responded to. Bitcoin services can make money off fees regardless of the price. For that matter, investors are not infallible, and at the same time understand the potential for some of their investments to be flops. Can't hit a homer if you never swing.

VC investment is of the order of $400 million dollars in the last 24 months for a currency with a market cap of 5 billion dollars. That is massive investment compared to the size of the current userbase and economy. That is investment with expectation of growth. Frankly this place is becoming a doomer echo chamber.

Don't be so dramatic. I'm not calling for doom, I'm just pointing out that A) charging fees for helping others transact in bitcoin is a much safer way for investors to profit and B) while investors never expect their investments to fail (or else why would they invest?), they are prepared for the possibility. That includes investments in bitcoin.

I think the point is the size of the investment relative to bitcoin adoption and use now. It will take a long time to recoup 30 million dollars from a bitcoin wallet company with no users. Venture capitalists throw darts at a wall in the hope a few will strike gold. But 400 million dollars is an awful lot of darts.

[JorgeStolfi]

VC investment is of the order of $400 million dollars in the last 24 months for a currency with a market cap of 5 billion dollars. That is massive investment compared to the size of the current userbase and economy. That is investment with expectation of growth.

This amount seems to double at each retelling, like my crypto holdings.    I think I saw 70 million in an article yesterday.

Anyway, many bitcoin services now seem to be making enough money to justify that much investment:

* By my estimates, SMBIT has collected 2--5 M$ in fees from its clients, so far.  When it started in Sep/2013, it also sold some 18'000 old BTC that belonged to its founders, which may have netted them another 2 M$

* Bitpay claimed to have processed 100 M$ of payments in 2013.  I don't know how much they processed in the last 12 months, but they must have made several M$ in fees and trading margins.

* Bitstamp clients trade over 10'000 BTC per day.  Assuming 0.3% average trading fee, that is 30 BTC/day, or ~3.5 M$/year.  Exchanges may also make money from deposit/withdrawal fees, interest on leveraged trading, arbitrage, trading against their clients, etc.

* Large mining enterprises may earn hundreds of BTC per day, and their costs (including equipment) may be 50% of that, or less.  Thus, their net profit may be in the tens of M$/year.

So, there does seem to be enough revenue sources in the bitcoin ecosystem to justify 100 M$ VC investment -- even if it will not grow beyond its present size.

(All the revenue of those companies, by the way, comes out of the pockets of those who are buying and/or using bitcoins now.)

[JorgeStolfi]

Jorge how much of the VC money invested in bitcoin in the last 24 months originated in mainland china?

I don't know, but I seem to recall Huobi (or OKCoin?) boasting of a 10 M$ VC investment, earlier this year.

[ChartBuddy]

Explanation

[spooderman]

Lil wall on stamp