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

[molecular]

If the invested funds was taken from BTC savings they want BTC back, not FIAT.

I would have to agree with this.  +1

yep, so for those people, the selling (via asic manufacturer) of the BTC has already ocurred. Next up: mining like hell without selling.

I'm not sure however, how large that group is compared to the group that wants to recover fiat.

[1715323976]

1715323976

[molecular]

ETF experts estimate there are roughly four dozen APs in the market. These include: Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, KCG, Morgan Stanley, Nomura, Société Générale, UBS and Virtu Financial, which specialises in high-frequency trading.

The banks don't want to support Bitcoin ? What a scoop  

The scoop is, they can not be guaranteed liquidity in the slam-bang Bitcoin economy.

You have to understand that the game they play uses a Martingale strategy. But that strategy fails if liquidity can not be guaranteed. In a case where liquidity can be guaranteed through issuing fiat (buying on a virtually unlimited line of credit), the fix is in. But that liquidity has to be on both sides of the book, which means you also have to be able to fractionalize the underlying security at will. And you can not do that if the underlying security is constantly being thrown into a liquidity crisis. What this means is that they can have no advantage simply through a guarantee of having the deepest pockets, and must then manage risk like the rest of the market does. Bitcoin distributes risk in the manner, which is an unacceptable prospect to the banks. 

Isn't this wonderful? I love it!

[Richy_T]

I've been considering building a multi-GPU mining rig, even though it'll be barely profitable but cheap second hand cards would make a difference.

That's the problem with mining. It's filled with irrational actors. If you're looking to make a profit, you'll be competing with people (like me*) who will mine even at a loss. It might have worked for a while when hardware to hash was rare but now it's out there and cheap and you can't even hope to resell it for alternate use later.

Supply and demand dictates that this means miners end up operating at marginal profits or none at all. The only wildcard is the future price of Bitcoin. If it rises as it should, it turns into a good investment for early adopters. Of course, if everyone is expecting high prices later, that increases the loss miners are willing to mine at. Miners who are operating in this zone are likely to hold since an immediate sell means immediate loss (or they may be believers in which case they are holding simply to have later. Not everyone needs to realize short-term profits on their investments).


*I do a little mining on the side as a hobby but it's insignificant.

[Rampion]

If the invested funds was taken from BTC savings they want BTC back, not FIAT.

I would have to agree with this.  +1

yep, so for those people, the selling (via asic manufacturer) of the BTC has already ocurred. Next up: mining like hell without selling.

I'm not sure however, how large that group is compared to the group that wants to recover fiat.

Yep, it's true, I've been a "100% BTC" miner myself, but I'm seeing a shift in the sentiment with the ASICs. I see people wanting to recover their fiat, and only then hoarding.

[01BTC10]

Someone is having fun flashing 500BTC at $97.5

[barbs]

i see that too

[Rampion]

Someone is having fun flashing 500BTC at $97.5

peanuts...

[derpinheimer]

Someone is having fun flashing 500BTC at $97.5

peanuts...

The whales are probably laughing at his "call".

[JimboToronto]

Just finishing my morning coffee and checked in to see we're stuck in the same directionless dither as yesterday afternoon, but a buck lower due to that one 2k+ dump last night.

Whales, whales, please come out and play. My popcorn is getting stale.

[micalith]

If the invested funds was taken from BTC savings they want BTC back, not FIAT.

I would have to agree with this.  +1

yep, so for those people, the selling (via asic manufacturer) of the BTC has already ocurred. Next up: mining like hell without selling.

I'm not sure however, how large that group is compared to the group that wants to recover fiat.

Yep, it's true, I've been a "100% BTC" miner myself, but I'm seeing a shift in the sentiment with the ASICs. I see people wanting to recover their fiat, and only then hoarding.

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

[lucas.sev]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

[Richy_T]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.

[Rampion]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Most of GPU miners didn't want ROI as soon as possible, as I explained earlier - they counted on reselling their GPUs, and they were mostly hobbyist. But I'm a miner myself, I know a lot of miners, I've seen in first person who are the customers of companies like KnC and how much they are spending, and you have to understand that this last media bubble exposed Bitcoin to a lot of new and uneducated people who run profit calculators at current difficulty (without having their miners yet), they do not even understand that difficulty is growing exponentially, and at the end of the day there is a "gold rush" in which a lot of new people is entering mining because they think they will get rich quick... So we have now a) a lot of individuals investing money they cannot afford to lose on BTC miners, and as you surely know there is a "get-rich-quick" feeling on BTC - they think they will recoup their investment FAST, and this is why they are putting in this game more money they should; b) there are more and more "professional" miners that are investing money in mining with the only intention of generating profit - they will run their operations as a business. That people has to pay for huge electricity costs, renting of industrial places where they will host their operations, etc. etc. etc. A lot of fiat expenses to cover.

During the GPU era, I rarely saw a) and b) miners, most were small-time hobbyist, running their rigs in their bedrooms. During this change to ASIC, I'm seeing a lot of both a) and b). This people needs to recoup fiat ASAP.

[Rampion]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.

I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.

This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.

[Pompobit]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Most of GPU miners didn't want ROI as soon as possible, as I explained earlier - they counted on reselling their GPUs, and they were mostly hobbyist. But I'm a miner myself, I know a lot of miners, I've seen in first person who are the customers of companies like KnC and how much they are spending, and you have to understand that this last media bubble exposed Bitcoin to a lot of new and uneducated people who run profit calculators at current difficulty (without having their miners yet), they do not even understand that difficulty is growing exponentially, and at the end of the day there is a "gold rush" in which a lot of new people is entering mining because they think they will get rich quick... So we have now a) a lot of individuals investing money they cannot afford to lose on BTC miners, and as you surely know there is a "get-rich-quick" feeling on BTC - they think they will recoup their investment FAST, and this is why they are putting in this game more money they should; b) there are more and more "professional" miners that are investing money in mining with the only intention of generating profit - they will run their operations as a business. That people has to pay for huge electricity costs, renting of industrial places where they will host their operations, etc. etc. etc. A lot of fiat expenses to cover.

During the GPU era, I rarely saw a) and b) miners, most were small-time hobbyist, running their rigs in their bedrooms. During this change to ASIC, I'm seeing a lot of both a) and b). This people needs to recoup fiat ASAP.

agree

[lucas.sev]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.

I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.

This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.

You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.

[Rampion]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.

I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.

This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.

You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.

I surely don't know what's the %, but I surely know there are a lot of newcomers spending all their fiat savings (tens of k's of $) in miners because they think they will break even in one month and then they will have a x10 ROI in the first year... Loan or no loan I don't know, but you can be sure they are throwing at this more money they can afford to lose because they think this is a "no brainer" and they do not want to "miss the train".

I know for sure because I've been meeting/discussing with a lot of guys like that since March, both in cyber and meatspace.

There will be a lot of pain for miners very soon, you will see.

[bitcryptonit]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.

I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.

This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.

You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.

I surely don't know what's the %, but I surely know there are a lot of newcomers spending all their fiat savings (tens of k's of $) in miners because they think they will break even in one month and then they will have a x10 ROI in the first year... Loan or no loan I don't know, but you can be sure they are throwing at this more money they can afford to lose because they think this is a "no brainer" and they do not want to "miss the train".

I know for sure because I've been meeting/discussing with a lot of guys like that since March, both in cyber and meatspace.

There will be a lot of pain for miners very soon, you will see.

that doesnt mean people will start selling bitcoins asap. my mining rig didnt pay for itself and its reason i wont sell them cheap.

[Rampion]

that doesnt mean people will start selling bitcoins asap. my mining rig didnt pay for itself and its reason i wont sell them cheap.

They will start selling bitcoins ASAP to cover their variable costs, or they will have to shut their rigs off. This already happened in 2011. Price was depressed for a long time, there were a lot of coins hitting the exchanges on a daily basis, and the hashrate actually declined because mining became unprofitable unless you had free electricity and no rent to pay for your operation. The "2011 mining gold rush" was triggered by a speculative bubble and a quickly rising BTC/USD exchange rate - history repeats itself, and the most probable outcome is that we will have the exact same situation in 2013.

To this there is an added unknown - GPU miners always counted on reselling their cards, and ASIC miners are counting on this too ATM. Most newcomers still dream about selling their $2k rig at $35k on ebay like some Avalon batch #1 owners did. But, they are deluded - this won't happen, as soon as supply and demand of ASIC miners adjust there won't be much resale potential, the only way to sell your unit will be to sell well below to market price - which will be adjusted to how many BTC the miners will generate.

I'm not speaking about the small guy buying one Klondike or BFL Single miner for his dorm room - I'm speaking about the big, professional mining operations that are being set up, and that will concentrate a big part of the hashing power.

ASICminer did very well, they didn't have the necessity to dump a lot of coins because they did the right thing in the right moment. The right moment is gone, many didn't realize that and are investing in multiple TH/s thinking they will get rich quick. Those type of guys, which in aggregate will be an important part of the hashrate, are the ones who will have no other option than to dump to at least cover their costs.

This already happened after the 2011 bubble, and I don't see why it won't happen again.

[micalith]

problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.

Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years

Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.

I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.

This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.

You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.

I surely don't know what's the %, but I surely know there are a lot of newcomers spending all their fiat savings (tens of k's of $) in miners because they think they will break even in one month and then they will have a x10 ROI in the first year... Loan or no loan I don't know, but you can be sure they are throwing at this more money they can afford to lose because they think this is a "no brainer" and they do not want to "miss the train".

I know for sure because I've been meeting/discussing with a lot of guys like that since March, both in cyber and meatspace.

There will be a lot of pain for miners very soon, you will see.

Thanks for explaining all that and sharing your perspective on new overexcited miners. If the proportion of fiat-seeking miners, including the pro setups amounts to a significant proportion, I can agree that we'd easily average well below 100 for the rest of the year, and surely carry on that way well into 2014 until something other than SR and mining becomes significant.

OT: I'm glad I didn't hop on that one as I wouldn't have been at the front of the list. I got a small number of USB Erupters because of being able to get them straight away, and figure that the hobby will have been worth, even if it means waiting a year or two to break even. They really should be selling those for a fraction of the current price to be fair...

Better GPU mine those litecoin before they get ASICs too!