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

[mikeh2]

I wonder if it's the same prick that borrowed 25k btc to short at 300.

[1715209973]

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[1715209973]

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[mestar]

Absolutely not. There is no intrinsic value at all, that is, no use value, or, you can not consume a bitcoin leading to its destruction, and at the same time gain something useful. *)

Said otherwise, bitcoin has only money value, and in this regard it is the same as paper money.

It is at the same time pure money, and sound money. This has never existed before in history.

The money value is by definition speculative, all actors at all times have to decide for themselves what value (real world, use value) it is possible to exchange the bitcoins for in the future, far or near.

*) I know, you can prove that you have destroyed bitcoins to prove something...

And how do you think that would be compatible with:

http://en.wikipedia.org/wiki/Velocity_of_money

If the network proper is used to transfer a certain total value (measured in USD) over a certain time span, then given the money supply (total bitcoins in circulation, in this case) that transaction usage will provide a lower bound for the USD valuation per coin (assuming transactions are not instantaneous - which they aren't, even if the pure protocol part of it almost is, but there's slow humans involved as well )

I'd call that a pretty good candidate for "fundamental" valuation (even if the exact value of it is up for debate)

Cool.  So, how much is it?

Assume all daily bitcoin volume are usefull transactions, this will give us an upper bound.

[samsonn25]

Noob question. Is there a way for one to somehow value this instrument for market vs intrinsic value.. Any ratio performance driver?Or something similar in a way to 3 financial statement forecasting model for equities or is TA the only way to ride?

If I told you  $ .0000000025  you wouldnt believe me.

If I told you  $1,000,000,000 you probably wouldnt believe me either.

[ChartBuddy]

Coin
Explanation

[mestar]

...  velocity of money ...

What's interesting about money velocity is it's range. Average time bitcoin is held can vary from 10 minutes (confirmation time) to 20 years (retirement money), that is in million times. That is if bitcoin perception in user's mind changes from "hot potato" to "gold", it price will increase million-fold.

Once you decide to hodl, you do not influence the price of bitcoins.  The price is decided by those that trade on the exchanges. 

Currently, those are speculative buyers, speculative sellers,  buying to 'transact', selling to close the 'transact' loop,  and daily $700,000 (or less) that miners have to sell to pay for running costs.

Third and fourth on that list should be equal.  So, once the first and second items on that list become equal, (and there is no reason why speculative buying would have to be higher that speculative selling), the only way the price of bitcoin will go is down.  Miners do have real bills to pay.

[fichtn12345]

GAME OVER MAN

GAME OVER

uhm... insert coin?!

[mestar]

I guess we could always lower the difficulty (again)?

And it would be the third time that that happened.

[Sitarow]

...  velocity of money ...

What's interesting about money velocity is it's range. Average time bitcoin is held can vary from 10 minutes (confirmation time) to 20 years (retirement money), that is in million times. That is if bitcoin perception in user's mind changes from "hot potato" to "gold", it price will increase million-fold.

Once you decide to hodl, you do not influence the price of bitcoins.  The price is decided by those that trade on the exchanges. 

Currently, those are speculative buyers, speculative sellers,  buying to 'transact', selling to close the 'transact' loop,  and daily $700,000 (or less) that miners have to sell to pay for running costs.

Third and fourth on that list should be equal.  So, once the first and second items on that list become equal, (and there is no reason why speculative buying would have to be higher that speculative selling), the only way the price of bitcoin will go is down.  Miners do have real bills to pay.

You forget that there are alt coins that are being used in order to lower BTC/USD lower so that they can sell those alts for higher USD value then they normally would fetch bassed on operating expenses.

[mestar]

...  velocity of money ...

What's interesting about money velocity is it's range. Average time bitcoin is held can vary from 10 minutes (confirmation time) to 20 years (retirement money), that is in million times. That is if bitcoin perception in user's mind changes from "hot potato" to "gold", it price will increase million-fold.

Once you decide to hodl, you do not influence the price of bitcoins.  The price is decided by those that trade on the exchanges. 

Currently, those are speculative buyers, speculative sellers,  buying to 'transact', selling to close the 'transact' loop,  and daily $700,000 (or less) that miners have to sell to pay for running costs.

Third and fourth on that list should be equal.  So, once the first and second items on that list become equal, (and there is no reason why speculative buying would have to be higher that speculative selling), the only way the price of bitcoin will go is down.  Miners do have real bills to pay.

You forget that there are alt coins that are being used in order to lower BTC/USD lower so that they can sell those alts for higher USD value then they normally would fetch bassed on operating expenses.

Those would easily fit in the 'speculative buying and selling' categories.

[Morecoin Freeman]

Just bought more at 216. I don't worry.

funny enough for some reason that was a buy in point i picked as well

 


still wouldn't mind further drops

Great minds think alike.

I'm also buying more if it drops further. It is all good cheap coins. No doubt we will see higher prices at some point in time.

[ParabellumLite]

Just bought more at 216. I don't worry.

funny enough for some reason that was a buy in point i picked as well

 


still wouldn't mind further drops

Great minds think alike.

I'm also buying more if it drops further. It is all good cheap coins. No doubt we will see higher prices at some point in time.

No doubt... You are free to believe what you want, and I won't force you to take any particular position regarding where Bitcoin is headed of course, but please do the following. When you go to bed tonight just stare in the mirror and speak those words: 'No Doubt'. And ask yourself if you really believe that is the right way of thinking.

Take care Morecoin.

[samsonn25]

...  velocity of money ...

What's interesting about money velocity is it's range. Average time bitcoin is held can vary from 10 minutes (confirmation time) to 20 years (retirement money), that is in million times. That is if bitcoin perception in user's mind changes from "hot potato" to "gold", it price will increase million-fold.

Once you decide to hodl, you do not influence the price of bitcoins.  The price is decided by those that trade on the exchanges. 

Currently, those are speculative buyers, speculative sellers,  buying to 'transact', selling to close the 'transact' loop,  and daily $700,000 (or less) that miners have to sell to pay for running costs.

Third and fourth on that list should be equal.  So, once the first and second items on that list become equal, (and there is no reason why speculative buying would have to be higher that speculative selling), the only way the price of bitcoin will go is down.  Miners do have real bills to pay.

You forget that there are alt coins that are being used in order to lower BTC/USD lower so that they can sell those alts for higher USD value then they normally would fetch bassed on operating expenses.

Those would easily fit in the 'speculative buying and selling' categories.

I agree.  Bitcoins average daily volume is greater than all other alt coins Total market cap except LTC.

[Erdogan]

http://en.wikipedia.org/wiki/Velocity_of_money

It is not compatible. I don't give a shit about that article, or the concept of velocity of money. I have written about that numerous times. Although it can be computed, giving a number, the parameter says exactly nothing of the value of money.

I don't get. At least at its core, this isn't some economical conjecture, this is just what you can or cannot do given a set of constraints on your medium of exchange.

If we agree on a medium that consists of a total of 10 tokens, we know that we'll buy and sell goods worth $100 each day, each transfer causes the tokens used in that transfer to be out of circulation for one day, then there is no way around an associated valuation per token of at least $10, or one of the other constraints has to give in (more tokens, less value transferred, less time before token is back in circulation).

At least to my understanding, velocity of money is essentially a formalization of the intuition behind the trivial example I just gave.

But feel free to correct my lack of understanding on this matter. It's possible that I'm missing something very fundamental here.

To measure the velocity, you have to remove transactions that are purely financial, and those transactions in the production structure that would be eliminiated with a completely vertical business structure. Basically, you want only the payments for consumer goods. That means that it is just another measure of the total consumer production.

In bitcoin, you can use bitpays numbers for a year and add some percentage for all the rest of the consumer payments, then divide by the found coins.

In practice velocity is never measured, it is computed using the absurd keynesian quantity formula, which then always is correct, because any other three numbers you put into the formula, you can fix with the velocity.

[Erdogan]

just spent 10$ in bitcoin..

..

..

..

..

aaaaaaand iv earned it back...

Just spend 10$ on a 4x leveraged long..
..
..
..
..

aaaaaaaand it's gone!

[ChartBuddy]

Coin
Explanation

[JorgeStolfi]

Assume all daily bitcoin volume are usefull transactions, this will give us an upper bound [to bitcoin's value as currency].

A good fraction of the transaction volume in the blockchain is definitely not payment for goods and services.  Much of it is coins moving between addresses that belong to the same person, such as hotwallet/coldwallet flow.  Add to that tumbling, deposit and withdrawal to exchanges, etc. Here is a summary of partial analyses that identify various non-commercial components of the traffic.

Bitpay processes about 1000-2000 BTC/day, but almost all of that seems to be miners paying bills and/or equipment. Let's say that the real use for e-comemrce through BitPay it is 500 BTC/day.  Multiply by 20 (wild guess) to estimate the world total by all processors and by direct bitcoin payments.  We get 10 kBTC/day of e-commerce.  That is still only 5% of the ~200 kBTC/day blockchain transaction volume (even after excluding apparent change-backs from the latter).

At current prices, that would be about 2 million USD/day.  If there were no speculation, each of the 13 million BTC in existence would be unavailable only between being bought by a customer and being sold by the merchant to another customer.  If that time is at  most 30 days, then the 13 million coins would be storing at most 60 million USD.  That gives about 5 USD/BTC.  If half the coins were locked up by long-term speculators, the price would still be ~10 USD/BTC.

[Sitarow]

[bassclef]

LTC has hardly budged during this move, interesting. Seems to have found a comfortable bottom.

[AZwarel]

...  velocity of money ...

What's interesting about money velocity is it's range. Average time bitcoin is held can vary from 10 minutes (confirmation time) to 20 years (retirement money), that is in million times. That is if bitcoin perception in user's mind changes from "hot potato" to "gold", it price will increase million-fold.

Once you decide to hodl, you do not influence the price of bitcoins.  The price is decided by those that trade on the exchanges. 

Currently, those are speculative buyers, speculative sellers,  buying to 'transact', selling to close the 'transact' loop,  and daily $700,000 (or less) that miners have to sell to pay for running costs.

Third and fourth on that list should be equal.  So, once the first and second items on that list become equal, (and there is no reason why speculative buying would have to be higher that speculative selling), the only way the price of bitcoin will go is down.  Miners do have real bills to pay.

That is factually wrong. Stop reading Marxism...(labor theory of value is a fallacy, and was since 1872). Holders do affect price! Just imagine a scenario, where everyone who bought a bitcoin would hold. Price would skyrocket. The only way a new buyer could get bitcoin is to find the first holder who partakes his btc at a given highest bidding price (that is market essentially). Every holder is a potential seller, there is no economic theory to exclude holders from the "seller" position.

Also, not every miner has to sell to "pay the bills" (you assume miners has btc as the only and exclusive revenue.). I do not. I mine, i did not sell a fraction of my BTC so far. Just because i mine BTC does not mean that is the only revenue i have, so i balance my other revenue costs to me to pay electric bill vs future possible profit from mining bitcoin. And i am sure most of the great miners (great as hash/sec) does the same, they run on deficit for now(? we can not tell) to come up profit in the future, it is called investing ...

Mining cost has nothing to do with btc price. It is the other way around, if at all. If you exclude the failing cloud mining services, you will see that all the other miners are still mining (hash/sec ain't dropping significantly). From genesis block, btc had no price at all for months, even though mining still had costs.

Stop spreading Marxism please!

[Sitarow]

BTC/LTC volume is getting thin.