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

[keithers]

This last trip into the $300 may have been the last time

[magicmexican]

bear traps everywhere

[roslinpl]

This last trip into the $300 may have been the last time

I have same opinion

And I see people are very optimistic too:) so price will rise with our support

[mmitech]

How can you say there is 0% chance of below 200? That is ridiculous. There is no such thing as 0% chance. What if tomorrow,
1. U.S. bans bitcoin
2. A flaw is found in the code
3. EC or SHA256  is broken
4. The existing exchanges shut down due to fraud or seizure.
5. Someone randomly decides to dump 30KBTC at market on bitstamp.
6. The economy melts down

sub 1% total.  6 is not a case.  in a meltdown btc will only correlate weakly.

"sub 1%" chance for Bitstamp going belly up because Unicredit suddenly pulls the plug, and prices plunging as a result (even if just for a flash crash from which we immediately recover)?

That's an awfully optimistic stance (and I say that as an active trader on stamp).

EDIT: in case this isn't clear from the above, and lest I be accused of "bear FUD"... there's nothing wrong with Unicredit and Bitstamp right now, to my knowledge. Don't panic. I just consider the entire banking/exchange situation to be somewhat fragile, so in my mind, there's a > 1% chance that things can go sour without much warning.

The local unicredit Branch employees are Bitcoin bulls, I know few of them personally, but this doesn't represent the big picture of what Unicredit Bank as a corporate thinks about Bitcoin which is unknown for me...

I'm sure they are, I suspect the Bitstamp account brings in quite a nice bit of revenue and fees.

But that's not the point, right? We were assigning probabilities to events, pulled out of our asses, but motivated by our experience and expectations. And my experience and expectation is that the banking interface is a fragile one, that could break. Not likely, so I personally don't see more than a, say, 5% chance that it happens, but "sub 1%" is another way of saying it's nigh impossible, and that I disagree with.

I agree, I was just pointing out that Banks are aware of Bitcoin, and when we say Banks we are not talking about computers and buildings but about people and employees running/working in these banks.


yet, I share the fear with many of you, if something somehow happen to an exchange's Banking account, basically only people who have funds there are fucked, but if anything happens to the bank (just look to the new EU Bank bailing road-map) than not only Exchanges are fucked but pretty much everyone living in EU and the ones who didn't even hear about Bitcoin will be the most effected.

if I summarize the situation, what is happening in the world right now doesn't look so promising, and having fiat sitting in your bank account is not safer than having Bitcoin sitting in your wallet, even when considering a scenario when an exchange like Bitstamp gets fucked up by its bank, the consequences will be temporary comparing with what could go wrong if something similar happens with the EU banking system.

The fact is that an exchange commingling all their customers funds in one single bank account is simply non-compliant, and even illegal in most of the EU.

Just check how brokers work: you need to open a bank account UNDER YOUR NAME on a certain bank, and give the broker an authorization to operate with your account for this or that purpose - but customers funds are never commingled, each customer has his own separate bank account.

Bitcoin exchanges (apart from B-C afaik) do not operate that way (not even Kraken), exposing customers to a huge risk. It just takes one rotten seed (eg, a drug dealer) operating in exchange X and the only option LE has is to freeze the full account - that's why you cannot take customers deposits* in the EU if you are not a bank.

*deposit = holding funds on behalf of a third party - those funds are NOT legally yours, you are just holding them on behalf of your customer - that's what banks and only banks do.

I get the Idea of how brokers work, but an Exchange dealing with Bitcoin is simply acting an Escrow while brokers have a different business model than a Bitcoin exchange.

Stock exchanges are not designed for everyone, but Bitcoin is designed to be widely used for normal users who wont go through the hassle of opening an account and linking it to an exchange just to buy a bitcoin.

coinbase operates the same way as you described above, but coinbase without an exchanges like Bitstamp wont be possible, unless the adoption of Bitcoin by merchants and their daily transaction volume becomes equal to the need of users to buy/sell.

[bitgeek]

This last trip into the $300 may have been the last time

I have same opinion

And I see people are very optimistic too:) so price will rise with our support

You know that people's moods can go from one extreme to another really fast, right?

[ShroomsKit]

This last trip into the $300 may have been the last time

You mean till the next Chinese rumour.

[Rampion]

I get the Idea of how brokers work, but an Exchange dealing with Bitcoin is simply acting an Escrow while brokers have a different business model than a Bitcoin exchange.

Stock exchanges are not designed for everyone, but Bitcoin is designed to be widely used for normal users who wont go through the hassle of opening an account and linking it to an exchange just to buy a bitcoin.

coinbase operates the same way as you described above, but coinbase without an exchanges like Bitstamp wont be possible, unless the adoption of Bitcoin by merchants and their daily transaction volume becomes equal to the need of users to buy/sell.

Believe me if I tell you that I did a thorough due diligence on the matter and I've received formal replies from financial regulators on more than one EU country: Bitstamp is absolutely non compliant under EU regulations, I can guarantee you that.

Coinbase is a completely different business: they are not an "exchange", they are a "bureau de change" (like the one in which you exchange currency at the airport): the main difference is that when you are buying or selling on Coinbase your legal counterpart is Coinbase itself, and NOT another customer like it happens on Bitstamp, Kraken, etc.. When you are sending money to Coinbase from a legal POV you are transacting with Coinbase itself, they are not holding the money on your behalf while you transact with another customer - the reason they are operating that way and NOT as an exchange of the kind of Bitstamp (which is much more profitable revenue wise) is PRECISELY because they are a serious company and they know they cannot do that - at least currently, as having a banking license (as it IS required for a trading exchangr as per Bitstamp) is not only expensive but very lengthy as the barriers for newcomers are high.

If you read carefully the ToS of the emerging exchanges you will see hints of what I'm saying: the new one based on the UK is registered as a "bureau de change" in a Coinbase fashion precisely to avoid to adquire a banking license; the one just launched in Mexico says clearly that by sending them money you are adquiring their own virtual currency, which only purpose is to buy and sell cryptos, and that they DO NOT HOLD customer deposits (because from a legal POV you are buying their own "virtual currency" by wiring them money) - those are just tricks to try to avoid the hard cold truth, which is that you need to be a bank to hold deposits on behalf of third parties.

About the escrow: I've never looked into that business model, but I approached regulators explaining them EXACTLY how a Bitcoin exchange work and they have told me that under the PSP (payment service provider) / financial intermediaries EU regulation I needed to either have a banking license or to have a banking partner holding, controlling and supervising all customer deposits (because that money is not YOURS, it belongs to your customer). While I'm ignorant on that aspect, at this stage I'd bet that an escrow would need to comply with the same regulation, as they are acting as financial intermediaries by holding funds that do not belong to them.

[mah87]

I get the Idea of how brokers work, but an Exchange dealing with Bitcoin is simply acting an Escrow while brokers have a different business model than a Bitcoin exchange.

Stock exchanges are not designed for everyone, but Bitcoin is designed to be widely used for normal users who wont go through the hassle of opening an account and linking it to an exchange just to buy a bitcoin.

coinbase operates the same way as you described above, but coinbase without an exchanges like Bitstamp wont be possible, unless the adoption of Bitcoin by merchants and their daily transaction volume becomes equal to the need of users to buy/sell.

Believe me if I tell you that I did a thorough due diligence on the matter and I've received formal replies from financial regulators on more than one EU country: Bitstamp is absolutely non compliant under EU regulations, I can guarantee you that.

Coinbase is a completely different business: they are not an "exchange", they are a "bureau de change" (like the one in which you exchange currency at the airport): the main difference is that when you are buying or selling on Coinbase your legal counterpart is Coinbase itself, and NOT another customer like it happens on Bitstamp, Kraken, etc.. When you are sending money to Coinbase from a legal POV you are transacting with Coinbase itself, they are not holding the money on your behalf while you transact with another customer - the reason they are operating that way and NOT as an exchange of the kind of Bitstamp (which is much more profitable revenue wise) is PRECISELY because they are a serious company and they know they cannot do that - at least currently, as having a banking license (as it IS required for a trading exchangr as per Bitstamp) is not only expensive but very lengthy as the barriers for newcomers are high.

If you read carefully the ToS of the emerging exchanges you will see hints of what I'm saying: the new one based on the UK is registered as a "bureau de change" in a Coinbase fashion precisely to avoid to adquire a banking license; the one just launched in Mexico says clearly that by sending them money you are adquiring their own virtual currency, which only purpose is to buy and sell cryptos, and that they DO NOT HOLD customer deposits (because from a legal POV you are buying their own "virtual currency" by wiring them money) - those are just tricks to try to avoid the hard cold truth, which is that you need to be a bank to hold deposits on behalf of third parties.

About the escrow: I've never looked into that business model, but I approached regulators explaining them EXACTLY how a Bitcoin exchange work and they have told me that under the PSP (payment service provider) / financial intermediaries EU regulation I needed to either have a banking license or to have a banking partner holding, controlling and supervising all customer deposits (because that money is not YOURS, it belongs to your customer). While I'm ignorant on that aspect, at this stage I'd bet that an escrow would need to comply with the same regulation, as they are acting as financial intermediaries by holding funds that do not belong to them.

Kraken is also well known to be fully compliant and extremely careful about that (and about security) so I guess this model is possible too right ?

[billyjoeallen]

There was a coordinated evaporation of buy orders this morning ...

Now you just sound paranoid.  Exactly how does one "coordinate" an evaporation of buy orders?

There was a gap in the chart. Prices didn't fall to $400. They levitated downward. Somebody put in a bunch of limit buy orders when there was low volume, waited until everybody was asleep and then pulled them. People saw them being pulled and adjusted there positions accordingly. People watching for a retest of $340 on China news sold and many put in leveraged short positions.

and suddenly this thread suddenly gets flooded with bullish stuff from new accounts.

They suckered in a bunch of shorts, and then put on the squeeze. Look at the one day chart. this rally looks like a mini-version of the rally to $710. Just because you're paranoid doesn't mean they're not out to get you.

[fonzie]

Double top about to be confirmed = Game Over for now
Tempted to short for a while. I´ll give the bulls another hour to see if they can work it out.

[podyx]

Death bot is back? lol

[Adrian-x]

The fact is that an exchange commingling all their customers funds in one single bank account is simply non-compliant, and even illegal in most of the EU.

Just check how brokers work: you need to open a bank account UNDER YOUR NAME on a certain bank, and give the broker an authorization to operate with your account for this or that purpose - but customers funds are never commingled, each customer has his own separate bank account.

Bitcoin exchanges (apart from B-C afaik) do not operate that way (not even Kraken), exposing customers to a huge risk. It just takes one rotten seed (eg, a drug dealer) operating in exchange X and the only option LE has is to freeze the full account - that's why you cannot take customers deposits* in the EU if you are not a bank.

*deposit = holding funds on behalf of a third party - those funds are NOT legally yours, you are just holding them on behalf of your customer - that's what banks and only banks do.

So through in a gag order and this could have happened to Gox, I'm sure lots of silk road money was in Gox's bank.

I love this logic all the attacks on Bitcoin send the price up. This crap is already happened in Canada, the 5 big banks are hostile to Bitcoin, exchanges here are looking to bank overseas. Banks in jurisdictions what are friendly to Bitcoin are going to face the type of international scrutiny and resistance Mizuho Bank did in Japan for supporting MtGox.

This makes coinbase look the most viable, just not good for trading as you purchase is canceled if the trade goes against them.

[jl2012]

Loaded is offering a reward for information leading to the recovery of personal and client funds stored at MtGox:

https://bitcointalk.org/index.php?topic=489950.0

EDIT: Loaded is a great whale, for those that don't know.  

I'm pretty surprised to learn he still has a sizable amount there. There was plenty of chance to arbitrage and get out in the last bubble, even with profit.

It was not sizable enough to warrant a flight to Japan. However, it is sizable enough to ruin my weekend.

Loaded has disappeared since his weekend got ruined by gox. Hope he's alright

[JorgeStolfi]

How 'bout a 2 year average?  That would give quite the different picture   .

I posted such a plot a while ago, the average yearly appreciation from date X in the past to the present.  It was something like 900% gain for any date X up to Oct/2013, and 90% loss or worse for most X since Dec/2013.

Honestly though, it would be more fair to look at monetary inflation (in which bitcoin is still quite inflationary at present, admittedly).

Why would that be more fair?  What matters is what 1 unit of currency can buy.  That is not determined by how many units could be printed, not even by how many exist, but by how many are in circulation, and the demand for them.

Speaking of demand, I recall someone claiming that the bulk of bitcoin "commerce" (excluding investment and speculation), right now, is internet gambling.  Is that true?

[boumalo]

bear traps everywhere

Or an other bull trap
I am full BTC so I don't mind if it goes up

This last trip into the $300 may have been the last time

I have same opinion

And I see people are very optimistic too:) so price will rise with our support

320$ seems like a pretty good price to buy now!

[dreamspark]

Loaded is offering a reward for information leading to the recovery of personal and client funds stored at MtGox:

https://bitcointalk.org/index.php?topic=489950.0

EDIT: Loaded is a great whale, for those that don't know.  

I'm pretty surprised to learn he still has a sizable amount there. There was plenty of chance to arbitrage and get out in the last bubble, even with profit.

It was not sizable enough to warrant a flight to Japan. However, it is sizable enough to ruin my weekend.

Loaded has disappeared since his weekend got ruined by gox. Hope he's alright

I'm sure he's fine. Loosing money is always upsetting and I like loaded but he has plenty of coins to look at and cry, same cant be said for a lot of other people who lost their entire life savings.

[ChartBuddy]

Explanation

[Rampion]

Kraken is also well known to be fully compliant and extremely careful about that (and about security) so I guess this model is possible too right ?

Kraken is well known to have made a huge marketing effort to make people believe they are compliant. The reality is that they just have two banks accounts:

1) OPERATIONAL EXPENSES ACCOUNT (this is where the money to pay for company's expenses sit)
2) DEPOSITS ACCOUNT (this is where customer's money sit)

They say the never mix the funds, which is better from a practical POV (Bitstamp mixes everything on a single account, which is simply suicidal), but legally it is exactly the same as having a single bank account: both accounts are ON KRAKEN'S NAME, which means that if regulators need to go after a Kraken customer, they will just freeze the whole account because legally it is a property of Kraken. They do not have a banking license and when they are questioned about HOW can they say they are compliant if they are not compliant with the european Directive for Payment Services, they respond with a vague "we are operating under Fidor's banking license" which is NOT true - Fidor has no responsibility on none of their accounts, in fact they are "lending" their banking license to Bitcoin.de but NOT to Kraken.

As per Bitcoin.de legal disclaimer:

Notice pursuant to § 2 Section 10 of the Banking Act:

The Bitcoin Deutschland AG is acting as tied agent of the FIDOR Bank AG within the meaning of § 2 Section 10 of the Banking Act and provides the system or the completion of financial instruments in accordance with §1 Section 1a Sentence 2 No. 1 und No. 2 of the Banking Act exclusively in the name and for the account of the FIDOR Bank AG.

Now read the aforementioned sections of the Banking Act and you will see that it is very clear: if you are a financial intermediary/investment broker, etc. (which means holding/managing funds on behalf of third parties) you need to be either a bank, or a tied agent of a bank, which means that the bank is supervising and controlling the customers funds, which are NOT sitting on an account on your name. This is true for Bitcoin.de, NOT true for Kraken. Kraken is NOT a tied agent of Fidor, if they were they would NEED to state that clearly on their ToS. Fidor has no control nor supervision on neither of Kraken's accounts, you can call them and ask yourself (and then ask the same question on Bitcoin.de to see the difference).

[Spaceman_Spiff]

Honestly though, it would be more fair to look at monetary inflation (in which bitcoin is still quite inflationary at present, admittedly).

Why would that be more fair?  What matters is what 1 unit of currency can buy.  That is not determined by how many units could be printed, not even by how many exist, but by how many are in circulation, and the demand for them.

Because price inflation is more prone to "quick" (I am talking months to years here) ups and downs (due to credit and business cycles), while the monetary base is a better predictor for purchasing power on a very long timescale imo.  
Then again, my reasoning assumes that the use case of the currency doesn't really change substantially, and because bitcoin is so young, how it will be used probably has a bigger impact on price evolution than it's monetary inflation in the first years to come.  (but one can speculate about how it will be used, like Cypherdoc I think bitcoin is quite attractive as a store of value/reserve currency).

snip exchange compliancy

Thanks for the info dude, much obliged !

[cbeast]

It looks like April 15th is the start of a new China rally. Volume is up.