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

[JayJuanGee]

The listing of COIN will be a liquidity event like no other in BTC history.  The most extreme bubble in BTC history is the 53x ramp from April to June of 2011.  It would be unreasonable not to consider that the impact of COIN might exceed that event, therefore.  A 60x ramp would achieve that by a significant margin, without breaking new territory.  

Let's suppose that there is a 50% chance of COIN being listed, and an 90% chance of a multi-month topping formation to ensue, and a 10% chance of that formation, conditional upon its formation, breaking a new scale record.  I consider all of these estimates to be low-ball.  The resulting contribution to the aggregate value of a bitcoin in Q1 2015, over all scenarios, is 920; a 25 bp/diem return means that if all other scenarios were flat zeros, even so your expection is net 9 bp/diem positive carry against current BFX margin rates.  

If the stopping time of a 13% margin call at 620 is less that sqrt((920-620)*9/25) ~ 10 times the duration of the scenario (I take at 160 days), then there is a net negative expectation.  I will spare you the stopping time calculation (a bunch of stochastic integration very ill-suited to a forum post).  It is much less.  In other words, I consider provable given a few reasonable and not very limiting scenario assumptions (although not here proven even conditionally) the (perhaps obvious) conclusion that even the most eggregiously optimistic scenario cannot justify the risk of full margined carry, unless you can get substantially better rates (or higher leverage limits) elsewhere.

Holding, on the other hand, is a no-brainer.  

Intermediate leverage falls between, and I have yet to calculate the optimum, which depends on better scenario coverage for its confidence margins.  It really requires a numerical approximation to do it on a principled basis with reasonable margins, at my level of understanding.  I couldn't expect to produce a closed form for the general case in the time one could allow to do a doctoral dissertation, so it's just not practical for me to try.

TL;DR: HODL

Your posts tend to be fairly inspirational regarding the likely bullish direction of BTC prices.

Currently, I hold more than 100BTC, and I have been very tempted to double or triple my BTC holdings; however, I am a little nervous about such a decision.

I have around $400k in tax deferred index fund accounts (stock market, bonds and govt bonds), and it would be possible for me to make a one-time withdrawal of part or all of those funds, without any tax penalty - though it would likely be a taxable event, unless the funds are rolled into another tax-deferred vehicle.  I have been considering withdrawing $150k to put towards BTC... but then I would definitely be less diversified in my total investment package, and I would have a larger percentage of my quasi-liquid assets invested in BTC....   

I am pretty confident about the direction of BTC going up rather than down, yet I remain a little uneasy about making such a leap with my quasi-liquid assets and to take such a step.

Over the years, my various tax deferred index fund investments have earned an average of a bit over 6% per year, even though they have been doing better in the last few years - especially after recovering from the 30% decline in 2007.  For example, these tax deferred index fund investments they earned more than 21% in 2013, and about 6% in the first half of 2014.   

Nonetheless, I continue to lose confidence in holding these various quasi-liquid assets in USD, in part b/c I have additional other less liquid assets in USD, as well.  Additionally, as many participants in BTC believe that there are a considerable number of impending problems with USD, especially given the intense levels of quantitative easing that had been occurring, since about 2008 and seemingly ongoing. 

It seems that if there are future failures with USD, then those USD failures will be inversely related to BTC appreciation in value.   In this regard, it seems more likely that BTC values will double or triple (or even appreciate greater 10 to 100x) in the next few years, rather than my index funds, which could double (2x) in 10-15 years, if I am lucky.

I understand that ultimately these remain personal investment choices that each person has to make based on his/her own risk tolerances, assets and investment timeline.

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[ChartBuddy]

Explanation

[JustBetweenUs]

The listing of COIN will be a liquidity event like no other in BTC history.  The most extreme bubble in BTC history is the 53x ramp from April to June of 2011.  It would be unreasonable not to consider that the impact of COIN might exceed that event, therefore.  A 60x ramp would achieve that by a significant margin, without breaking new territory.  

Let's suppose that there is a 50% chance of COIN being listed, and an 90% chance of a multi-month topping formation to ensue, and a 10% chance of that formation, conditional upon its formation, breaking a new scale record.  I consider all of these estimates to be low-ball.  The resulting contribution to the aggregate value of a bitcoin in Q1 2015, over all scenarios, is 920; a 25 bp/diem return means that if all other scenarios were flat zeros, even so your expection is net 9 bp/diem positive carry against current BFX margin rates.  

If the stopping time of a 13% margin call at 620 is less that sqrt((920-620)*9/25) ~ 10 times the duration of the scenario (I take at 160 days), then there is a net negative expectation.  I will spare you the stopping time calculation (a bunch of stochastic integration very ill-suited to a forum post).  It is much less.  In other words, I consider provable given a few reasonable and not very limiting scenario assumptions (although not here proven even conditionally) the (perhaps obvious) conclusion that even the most eggregiously optimistic scenario cannot justify the risk of full margined carry, unless you can get substantially better rates (or higher leverage limits) elsewhere.

Holding, on the other hand, is a no-brainer.  

Intermediate leverage falls between, and I have yet to calculate the optimum, which depends on better scenario coverage for its confidence margins.  It really requires a numerical approximation to do it on a principled basis with reasonable margins, at my level of understanding.  I couldn't expect to produce a closed form for the general case in the time one could allow to do a doctoral dissertation, so it's just not practical for me to try.

TL;DR: HODL

Your posts tend to be fairly inspirational regarding the likely bullish direction of BTC prices.

Currently, I hold more than 100BTC, and I have been very tempted to double or triple my BTC holdings; however, I am a little nervous about such a decision.

I have around $400k in tax deferred index fund accounts (stock market, bonds and govt bonds), and it would be possible for me to make a one-time withdrawal of part or all of those funds, without any tax penalty - though it would likely be a taxable event, unless the funds are rolled into another tax-deferred vehicle.  I have been considering withdrawing $150k to put towards BTC... but then I would definitely be less diversified in my total investment package, and I would have a larger percentage of my quasi-liquid assets invested in BTC....   

I am pretty confident about the direction of BTC going up rather than down, yet I remain a little uneasy about making such a leap with my quasi-liquid assets and to take such a step.

Over the years, my various tax deferred index fund investments have earned an average of a bit over 6% per year, even though they have been doing better in the last few years - especially after recovering from the 30% decline in 2007.  For example, these tax deferred index fund investments they earned more than 21% in 2013, and about 6% in the first half of 2014.   

Nonetheless, I continue to lose confidence in holding these various quasi-liquid assets in USD, in part b/c I have additional other less liquid assets in USD, as well.  Additionally, as many participants in BTC believe that there are a considerable number of impending problems with USD, especially given the intense levels of quantitative easing that had been occurring, since about 2008 and seemingly ongoing. 

It seems that if there are future failures with USD, then those USD failures will be inversely related to BTC appreciation in value.   In this regard, it seems more likely that BTC values will double or triple (or even appreciate greater 10 to 100x) in the next few years, rather than my index funds, which could double (2x) in 10-15 years, if I am lucky.

I understand that ultimately these remain personal investment choices that each person has to make based on his/her own risk tolerances, assets and investment timeline.

Get rid of that worthless fiat. Only keep what you plan on spending. You know it is the right thing to do, you explained it pretty well yourself in your second-to-last paragraph.

[JayJuanGee]

Nice!!!!!!!

We moved up $3.00!!!!


 

what do I know just my pessimistic view over getting beat up on bitcoin by the above family/friends/co-workers etc that I tried to tell about it
last fall.....the consensus in my small world/group has not changed..in fact it seems more hostile...again if I'm right they all missed the boat


Searing

..Had a conversation last weekend with an otherwise very intelligent guy. He also thinks bitcoin is a ponzi and a scam..
We talked about the concept on money and ponzi's.. i didn't convince him of anything.. nor did he convince me of anything.. (his arguments were nothing i haven't heard before anyway)
At least he had heard of it and some opinions on it.. even if i thought they were wrong.

I don't waste time on people like this.. it's not my job to change their minds.. but maybe like you, we can revisit the topic in another 1/2 year.. and might have a different conversation.

Actually, over the 4th of July week, I had various opportunities to talk with a lot of old friends and relatives, and certainly, I brought up bitcoin with a number of them.  In fact, a few of these people had heard about bitcoin and seemed fairly well-informed about it  (even though their sources seemed to be from mainstream media - which caused them to be much less informed than they thought they were about the topic). 

In the end, it was fairly apparent that I was much more informed then each of them, and a few of these people told me that they would look into the matter further.  I have considerable doubts regarding whether more than 1 or 2 of them will invest.  I suggested that they just set up an account, and buy a small amount... anywhere between .1BTC and 20BTC.

I do enjoy talking with people who are interested in bitcoin, even though in the end, they have to decide for themselves about whether they are going to invest or NOT or whether they are going to research into the matter.  I tell them what I am doing regarding my BTC investment (more or less), and I tell them that I have researched into BTC fairly extensively, and I tell them that I am NOT trying to persuade them to invest or to sell them on the idea b/c even though I profit with increased BTC adoption, my profiting from BTC does NOT depend upon whether or NOT they invest.  I say that BTC prices are going to be going up, whether they chose to invest or NOT.

I tell these people that  I am only giving them a pointer of inside information based on my researching and investment into the matter, and in the future, they will likely thank me, if they act upon my information and chose to invest at this time and then to develop an ongoing research and investment strategy into BTC...or alternatively, just hold the BTC that they buy for a few years.  I also indicate that I can be available as a resource, in the event that they have questions or concerns about their research into BTC specifics.

[JayJuanGee]

Bids on Stamp look healthy. 1000 BTC to 620$ ; 3000 BTC to 610$. Ready to lift off. We also have a very similar fractal compared with the 430$ breakout.


TO THE MOON

is this a Fonzie I see before me?

It´s even worse. I used snakesoil sale tactics to lure in 3 friends of mine to invest altogether 45k$ into the BTC scheme in the the last 2 weeks.
I´m bullish as fuck( and of course ALL IN)!!!    

Oh shit, Fonzie is a bull, BTC prices must be going down!!!!!

[keewee]

Bids on Stamp look healthy. 1000 BTC to 620$ ; 3000 BTC to 610$. Ready to lift off. We also have a very similar fractal compared with the 430$ breakout.


TO THE MOON

is this a Fonzie I see before me?

It´s even worse. I used snakesoil sale tactics to lure in 3 friends of mine to invest altogether 45k$ into the BTC scheme in the the last 2 weeks.
I´m bullish as fuck( and of course ALL IN)!!!    

Oh shit, Fonzie is a bull, BTC prices must be going down!!!!!

This is only the second time I remember this happening. I'm pretty sure the last time he was bullish the price dropped and he said he'd never do it again 

[molecular]

interesting survey being conducted (high sample size, already more than 2000 participants).

example of a result:


(click link for all results)

it seems 2014 is not a good year at all regarding adoption (only 1% heard about bitcoin in 2014).

suprising the price doesn't slide more with ~ $2 million dollars worth of coins being mined each day (and probably quite a large part of them hitting the exchanges)

thoughts?

[empowering]

interesting survey being conducted (high sample size, already more than 2000 participants).

example of a result:


(click link for all results)

it seems 2014 is not a good year at all regarding adoption (only 1% heard about bitcoin in 2014).

suprising the price doesn't slide more with ~ $2 million dollars worth of coins being mined each day (and probably quite a large part of them hitting the exchanges)

thoughts?

I would say this is bs..  if it were a survey of people from the Bitcointalk.org then maybe.... but from the general public... I cannot see it...
99% of all media coverage has been in the past past 9 months edited: two years , and especially the past nine months  I would like to know who/where/how the sample group was picked...also any idea who is conducting and publishing this (anon?) survey.

[jmw74]

interesting survey being conducted (high sample size, already more than 2000 participants).

example of a result:


(click link for all results)

it seems 2014 is not a good year at all regarding adoption (only 1% heard about bitcoin in 2014).

suprising the price doesn't slide more with ~ $2 million dollars worth of coins being mined each day (and probably quite a large part of them hitting the exchanges)

thoughts?

Where would this survey reach people who'd just heard about bitcoin?  Likely not on this forum or reddit.

Also there hasn't been a lot of mainstream media news about bitcoin this year.

[aminorex]

I have around $400k in tax deferred index fund accounts (stock market, bonds and govt bonds), and it would be possible for me to make a one-time withdrawal of part or all of those funds, without any tax penalty - though it would likely be a taxable event, unless the funds are rolled into another tax-deferred vehicle. 

You need to put your crypto into a Roth vehicle.  All gains tax-free.  IRA or 401k.  I keep mine off-shore because the IRA structure shields the fund from foreign financial account reporting requirements.

[ChartBuddy]

Explanation

[jmw74]

99% of all media coverage has been in the past 9 months.

What are you smoking?

The major media has barely touched bitcoin all year.  I don't think mtgox's collapse was even close to as big a story as the price increase last April and November.  There was probably more coverage with Silk Road in 2011 than mtgox.

The only time the media tends to mention it is when the price is already skyrocketing.  Hasn't happened this year.

[molecular]

interesting survey being conducted (high sample size, already more than 2000 participants).

example of a result:


(click link for all results)

it seems 2014 is not a good year at all regarding adoption (only 1% heard about bitcoin in 2014).

suprising the price doesn't slide more with ~ $2 million dollars worth of coins being mined each day (and probably quite a large part of them hitting the exchanges)

thoughts?

I would say this is bs..  if it is a survey of people from the Bitcointalk.org then maybe.... but from the general public... I cannot see it...
99% of all media coverage has been in the past 9 months.

It's not from general public. 92% are r/bitcoin readers and 37% have a bitcointalk account.

EDIT: click image for the other results

[hdbuck]

interesting survey being conducted (high sample size, already more than 2000 participants).

example of a result:


(click link for all results)

it seems 2014 is not a good year at all regarding adoption (only 1% heard about bitcoin in 2014).

suprising the price doesn't slide more with ~ $2 million dollars worth of coins being mined each day (and probably quite a large part of them hitting the exchanges)

thoughts?

I would say this is bs..  if it is a survey of people from the Bitcointalk.org then maybe.... but from the general public... I cannot see it...
99% of all media coverage has been in the past 9 months.

It's not from general public. 92% are r/bitcoin readers and 37% have a bitcointalk account.

EDIT: click image for the other results

hearing about bitcoin doesnt necessarily implies you have "adopted" it.
nowaday, i'd guess far more people have heard about bitcoin (thx to the intense media coverage lately) but didnt take the leap.
patience patience, we need some macro-stormage to make people switch

[JayJuanGee]

Maybe I'm going to look back in one year from now (or even 6 months)

I really like this chart. 

I think that the chart depicts historical aspects of BTC prices that constitutes, more or less, a more than 8X increase per year over the almost 4 year period; however, most of that growth occurred in 2011 - accordingly, the growth seems to be skewed towards 2011.  In this regard, there seem to exist decreasing intensities in the magnitude of each of the BTC bubbles, and maybe the increased BTC prices have made difficulties in having continued bubbles of 8x or greater? 

NONETHELESS, if another major bubble of 8x or more were to occur, then these previous price increases will merely be part of the description of an ongoing pattern.   

Personally, I am torn about what to believe, yet I am somewhat skeptical that continued bubbles of 8x or more is sustainable, even though I do believe that it is possible to have a few more 8x or greater bubbles in the coming years.

The chart above shows both bursts and drops, and the price bursts occurred:

early 2011  = 5x

mid 2011 = 41x

late 2011 = 3x

2012 = 3x

early 2013 = 18x

late 2013 = 9x


So far 2014, has been mostly downward, with a bit of gradual upward momentum in the last two months; however, it seems that we are still waiting to see what is going to happen in the remainder of 2014 in order to characterize BTC prices for this year and to prognosticate the direction of BTC. 

Surely, it does seem possible that BTC prices will remain more or less flat for the remainder of 2014; however, given the intensity of continued ongoing good news, various multimillion dollar investments into BTC, the appearance that several wall-street interests are looking into BTC investments, government regulations that are tolerable towards ongoing BTC growth, efforts to establish more user-friendly applications, greater BTC adoption and awareness and continued opportunities for liquidity, it is seeming less and less probable that BTC prices can be kept down for the remainder of 2014, absent some catastrophic negative BTC event.  Also, it seems that if BTC prices go past $850 or so in the next 6 months, then inevitably, BTC prices are going to spurt into a new ATH, in the range of $2,500 to $5,000. 

[empowering]

99% of all media coverage has been in the past 9 months.

What are you smoking?

The major media has barely touched bitcoin all year.  I don't think mtgox's collapse was even close to as big a story as the price increase last April and November.  There was probably more coverage with Silk Road in 2011 than mtgox.

The only time the media tends to mention it is when the price is already skyrocketing.  Hasn't happened this year.

Really I saw a few big stories pre 2012, as "mild interest pieces" the past 1 year , 2 years it has been on pretty much every major news network/media outlet in the world once or twice a month (even more so past 9 months imo- it is everywhere) (original post now edited)

Also I realise not the same thing (based on "searches") but  http://www.google.com/trends/explore#q=Bitcoin  Dare say it is more informative than a 2000 "random" sample

(ps I am smoking the goodshit)

[sickpig]

Can anyone make a case that the price will not be at least twice this level within 90 days after COIN lists?

So for you it's just a matter of "when".... I'm glad.

Objectively speaking, once an ETF is available as a public investment vehicle, anyone who does not at least have exposure as a small percentage of a tax-deferred retirement portfolio is completely out of their mind. That alone is a monstrous amont of capital, total US retirement assets are on the order of $20 trillion. Capturing just one tenth of one percent of that would be about $20 billion slamming right into the float.

I do agree with both of you, once the Wii will need to buy btcs on the market to back their ETF surely the influx of money will be significant. I'm just not as sure as you're that COINS will happen soon if ever.

I think that the probability is pretty high but not equal to 1.

[molecular]

Maybe I'm going to look back in one year from now (or even 6 months)

I really like this chart.  

I think that the chart depicts historical aspects of BTC prices that constitutes, more or less, a more than 8X increase per year over the almost 4 year period; however, most of that growth occurred in 2011 - accordingly, the growth seems to be skewed towards 2011.  In this regard, there seem to exist decreasing intensities in the magnitude of each of the BTC bubbles, and maybe the increased BTC prices have made difficulties in having continued bubbles of 8x or greater?  

NONETHELESS, if another major bubble of 8x or more were to occur, then these previous price increases will merely be part of the description of an ongoing pattern.  

Personally, I am torn about what to believe, yet I am somewhat skeptical that continued bubbles of 8x or more is sustainable, even though I do believe that it is possible to have a few more 8x or greater bubbles in the coming years.

The chart above shows both bursts and drops, and the price bursts occurred:

early 2011  = 5x

mid 2011 = 41x

late 2011 = 3x

2012 = 3x

early 2013 = 18x

late 2013 = 9x


So far 2014, has been mostly downward, with a bit of gradual upward momentum in the last two months; however, it seems that we are still waiting to see what is going to happen in the remainder of 2014 in order to characterize BTC prices for this year and to prognosticate the direction of BTC.  

Surely, it does seem possible that BTC prices will remain more or less flat for the remainder of 2014; however, given the intensity of continued ongoing good news, various multimillion dollar investments into BTC, the appearance that several wall-street interests are looking into BTC investments, government regulations that are tolerable towards ongoing BTC growth, efforts to establish more user-friendly applications, greater BTC adoption and awareness and continued opportunities for liquidity, it is seeming less and less probable that BTC prices can be kept down for the remainder of 2014, absent some catastrophic negative BTC event.  Also, it seems that if BTC prices go past $850 or so in the next 6 months, then inevitably, BTC prices are going to spurt into a new ATH, in the range of $2,500 to $5,000.  

who wouldn't like that chart... it seems to imply more hype cycle iterations.

good observation on decreasing magnitude. If you look only at the major ones (41x, 18x, 9x), one could extrapolate that the next one might only reach 4.5x (if we put the start at $800, it would peak at $3,400)

[empowering]

interesting survey being conducted (high sample size, already more than 2000 participants).

example of a result:


(click link for all results)

it seems 2014 is not a good year at all regarding adoption (only 1% heard about bitcoin in 2014).

suprising the price doesn't slide more with ~ $2 million dollars worth of coins being mined each day (and probably quite a large part of them hitting the exchanges)

thoughts?

I would say this is bs..  if it is a survey of people from the Bitcointalk.org then maybe.... but from the general public... I cannot see it...
99% of all media coverage has been in the past 9 months. edited: two years , and especially the past nine months

It's not from general public. 92% are r/bitcoin readers and 37% have a bitcointalk account.

EDIT: click image for the other results

Hi- yeah I clicked and read- so that makes more sense to me- people that are reddit and forum users, are more likely to have heard of BTC longer ago- I think that forum users are quite a specific group of people, and it makes sense to me that they would also be the kinds of people that would be more likely to hear about Bitcoin first,  in the same way that I think that a lot of people that know about and understand about BTC have had exposure to other forms of trading (espcially some of the PM trading fraternity) i.e people that are more likely to have read literature that would have informed them about BTC (tech or trading crowd)  compared to the people I expect to be the next wave of adopters, who will get their news not from forums (and will likely never use a forum- not a huge % of the population does imo) and not from trading or tech related newses (where is proudhon?)  but from the mainstream media... and from companies like Dell accepting BTC etc

[keithers]

The high and low range has continued to get tighter and tighter.   I think it is only a $5-6 spread across most of the major exchanges.   In our world, this can only last for so long...