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

[adamstgBit]

i bought something with bitcoin yesterday

fulfilling the self-fulfilling prophecy?

why the F not!

 

[ShroomsKit]

And down we go.

[JorgeStolfi]

I suppose that, in the early days, sites like exchanges and online casinos would have a single bitcoin address for bitcoin deposits, and all clients would transfer bitcoins to it (using the decimal satoshi amount to identify their deposits); whereas now such sites commonly generate a new unique address for each client and/or each deposit.  Is this correct?

[spooderman]

i bought something with bitcoin yesterday

fulfilling the self-fulfilling prophecy?

why the F not!

 

You did WHAT?!?

[oda.krell]

TL;DR: You are wrong. And butthurt.

This is getting a bit kindergarten-y, isn't it?


Anyway.

The problem with your log-linear model isn't that it's not updated regularly. I know you do that.

The problem is the *extreme* laggyness of the model, and how you intend to use it. By the time your regression picks up the fact that we are in a huge bear market*, it is already much too late.

The log-linear trend can maybe, if you insist, be used to get an idea of the order of magnitude of the expected price, assuming nothing about the growth function up to now has fundamentally changed. And even then you should remind people that it is no guarantee either, just a reasonably motivated model.


* EDIT not our current situation, but what would happen if we see, say, another few months of bearish market.

[adamstgBit]

i bought something with bitcoin yesterday

fulfilling the self-fulfilling prophecy?

why the F not!

 

You did WHAT?!?

utilized the bitcoin network to efficiently convert a small amount of CAD into BTC to pay for a toy.

[LMGTFY]

I suppose that, in the early days, sites like exchanges and online casinos would have a single bitcoin address for bitcoin deposits, and all clients would transfer bitcoins to it (using the decimal satoshi amount to identify their deposits); whereas now such sites commonly generate a new unique address for each client and/or each deposit.  Is this correct?

I'm fairly sure MtGox used unique addresses for deposits, back when it was still based in the US. I don't know if more recent exchanges (relatively speaking...) behaved differently, though.

[p0peji]

I cant imagine the butthurt from the people who bought all along the way down and are still holding 

[oda.krell]

Your "advice" of buying because we are currently below it is based on wishful thinking and extremely biased interpretation of the data.

Same advice I would give, because 99.99% of all humans have a time horizon that extends beyond the current week, and don't watch charts every day, let alone all day.

It looks really bad for you, this mocking contempt for maturity, realism, and rationality.  I wouldn't want to play poker with that much drama, personally.  But then I never really took to reality TV either.

I find it hard to imagine how you can consider it anything but dispassionately objective to note that the historic trend is still holding, and therefore can be expected to continue to hold, until it ceases to hold.

This is a remarkably incoherent post for you. Guess the nerves of the hodlers are wearing thin at the moment.


>I find it hard to imagine how you can consider it anything but dispassionately objective to note that the historic trend is still holding

Who said anything about the "historic trend [not] holding"? I certainly didn't.

I simply reject the pathetically transparent attempt to turn the historic trend into something that it isn't, which is pretending that it is: (a) a guarantee that it will continue to grow like that, and (b) even when assuming point a) holds, that we see a continuation of growth *now*(ish).

Neither of the two points is a consequence of the historic trend analysis (how could it?), but it is regularly presented as such. Hence: snake oil sales talk.

[N12]

Time to post this again, yes?

We have seen the ups and downs and have realized it all works out in the end. 

This is the great delusion that markets bestow upon people, that a trend is invulnerable and "it all works out in the end" almost sounds like religious faith. I know that nothing I can say could possibly make you think otherwise, but still, please consider how you would react if Bitcoin slid 80% or 90% from here during the next 6 months. Even if the probability is small, are you ready for it?

Because this has happened before, and it happened in this very asset (even if you tell me that times are "different" now – well, to compensate, the price is higher to begin with!). I remember that time well. At the time, there was a long-term log support trendline, too, that was being drawn by everyone in this forum. It was violently BROKEN:



And guess what? That break ended up being the best time to buy. But few bought, for few had money to spare, and many of those who did have given up on Bitcoin. I will tell you that all along this decline, there was plenty of good news as well. I believe Bitpay was created amidst the bear market for example.

All I want to say is that eventually, all trends break. Prepare yourself for the improbable, because it is devastating to lose almost all of your wealth. Do not let your mind be compromised by Bitcoin cultists. Let this be a lesson from a former Bitcoin cultist who has made a fortune off Bitcoin by turning himself into a Bitcoin pragmaticist.

[rpietila]

The problem with your log-linear model isn't that it's not updated regularly. I know you do that.

The problem is the *extreme* laggyness of the model, and how you intend to use it. By the time your regression picks up the fact that we are in a huge bear market*, it is already much too late.

The log-linear trend can maybe, if you insist, be used to get an idea of the order of magnitude of the expected price, assuming nothing about the growth function up to now has fundamentally changed. And even then you should remind people that it is no guarantee either, just a reasonably motivated model.

I agree. Is there a point of controversy?

[N12]

Though the great thing about linear regression is that as long as the price starts out at 0, the slope can't ever be negative, so all is well, and all will forever be well so long as there is a non-zero trading price. Infinite profits ahead, guaranteed.

[wachtwoord]

These are all valid critiques on the model.

However, there isn't anything better. It's not like a stock which has assets and generate a positive free cash flow. Valuing commodities that are not used only in industry is inherently hard (not that valuing industrial commodities is easy but at least you have estimates of demand to go on). How would you value gold? Where is that price heading long term? Well we use long term charts (yes longer than Bitcoin) to show it matches inflation of fiat currencies (although one can only truly use charts after Nixon completely killed the dollar by ending the gold standard).

So Blitz (and others): do you have any better ideas? If so, I'm all ears

[rpietila]

Though the great thing about linear regression is that as long as the price starts out at 0, the slope can't ever be negative, so all is well, and all will forever be well so long as there is a non-zero trading price. Infinite profits ahead, guaranteed.

Eg.with Auroracoin the slope is already negative. Linear regression could not prevent it.

[oda.krell]

The problem with your log-linear model isn't that it's not updated regularly. I know you do that.

The problem is the *extreme* laggyness of the model, and how you intend to use it. By the time your regression picks up the fact that we are in a huge bear market*, it is already much too late.

The log-linear trend can maybe, if you insist, be used to get an idea of the order of magnitude of the expected price, assuming nothing about the growth function up to now has fundamentally changed. And even then you should remind people that it is no guarantee either, just a reasonably motivated model.

I agree. Is there a point of controversy?

Yes. Your presentation of it.


"Buy now, because we are (almost) guaranteed to turn around anytime now, based on the log trend."

That's the essence of your sales talk, and it is doing a disservice to Bitcoin.


"Buy now, it has historically proven to be a good approximate spot, but be prepared to see your USD value go down further in case the bear market continues."

That'd be an honest presentation of the historic results, but one that I have yet to see in this form.


In case you accuse me of putting words in your mouth, here's the type of presentation I have in mind:

- Trendline comparison: we are now at -0.322 log units. The trendline is at $966 and rising $7 per day, conclusion: rock bottom (of all of the time between the 4/2013 and 11/2013 peaks, only 2% (5 days) was spent this low)

There is no such thing as "rock bottom" of the trendline. If the market continues to go down south, your model will pick that up long after the fact.

For fairness sake, you do add disclaimers when pressed (like: "don't invest what you can't afford to lose"), but you are still regularly abusing your model in discussions about short-to-mid term predictions (e.g. was this the bottom or not?), where this model has no place whatsoever.

[boumalo]

I cant imagine the butthurt from the people who bought all along the way down and are still holding  

If you bought every week from 1000$ to 450$ today, your average cost per bitcoin should be around 640$ so you are down 30% and you need a 40% increase in price to be even

Your average cost is going down right now

[N12]

These are all valid critiques on the model.

However, there isn't anything better. It's not like a stock which has assets and generate a positive free cash flow. Valuing commodities that are not used only in industry is inherently hard (not that valuing industrial commodities is easy but at least you have estimates of demand to go on). How would you value gold? Where is that price heading long term? Well we use long term charts (yes longer than Bitcoin) to show it matches inflation of fiat currencies (although one can only truly use charts after Nixon completely killed the dollar by ending the gold standard).

So Blitz (and others): do you have any better ideas? If so, I'm all ears

Yes. Technical analysis, sentiment analysis and, to a certain extent, fundamental analysis all work with Bitcoin. Here is a good one, with real fundamentals: https://medium.com/p/ba5f3fcce103 *

Written by the CEO of gyft, who brings many of the same arguments I have been making here over the months (such as increased merchants like Overstock depressing prices and historical heights of never to be seen again miners' margins which are inevitably slowly bleeding).

*FUD warning, of course (Facts U Dislike).

[Peter R]

So Blitz (and others): do you have any better ideas? If so, I'm all ears

My idea is to consider the Metcalfe Value model (V ~ N²).  It makes no attempt to extrapolate into the future; however, it does show that the bitcoin market cap has grown in proportion to the square of what I refer to as the generalized user base over 4 years and over 1,000,000% change in price.

This should make Oda and Blitz happy, since this is not a predictive model (in time).  However, it provides support for Risto's exponential growth model because bitcoin's generalized user base has actually deviated less from true exponential growth than bitcoin's market cap has.  




The question of price then becomes one of adoption.  Will bitcoin continue to be useful to a growing number of humans?

[p0peji]

I cant imagine the butthurt from the people who bought all along the way down and are still holding  

If you bought every week from 1000$ to 450$ today, your average cost per bitcoin should be around 640$ so you are down 30% and you need a 40% increase in price to be even

Your average cost is going down right now

If you bought at the dips, but lets think of the bulls (the ones who cry CCMF, with every bull-trap) who buy when there is somewhat of a price increase, your average cost per bitcoin would be around 800$

[ArticMine]

No poll option for someone who is very bullish on bitcoin and very bearish on precious metals?