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

[Threebits]

Is it saying, the more bitcoin is used, the more pressured price is?

[oda.krell]

I still dont get how the price will rise if V is low, P= (M * V)/T means the greater V is the greater the price is, isn't it ? the case when the price will be high: if Transactions are low and both or one M or V rise greater than T.

Velocity of money is defined as: V = T / M

(see: http://en.wikipedia.org/wiki/Velocity_of_money)

For simplicity, we assume no. of coins in circulation to be constant, so we equate price with M. We can rewrite the above as: M = T / V, so it becomes clear that M ("price") decreases as V increases.

Or maybe I misunderstood the question?

[justusranvier]

what does that mean  P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency


which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

First of all, you're doing it wrong.

P is not the exchange rate of the currency - it's the price of good and services.

With M approximately constant, and with V approximately constant, increasing T means that the cost of good and services priced in Bitcoin will fall, a.k.a the purchasing power of a bitcoin has increased.

[mmitech]

I still dont get how the price will rise if V is low, P= (M * V)/T means the greater V is the greater the price is, isn't it ? the case when the price will be high: if Transactions are low and both or one M or V rise greater than T.

Velocity of money is defined as: V = T / M

(see: http://en.wikipedia.org/wiki/Velocity_of_money)

For simplicity, we assume no. of coins in circulation to be constant, so we equate price with M. We can rewrite the above as: M = T / V, so it becomes clear that M ("price") decreases as V increases.

Or maybe I misunderstood the question?

the OP said M * V= T * P

M is the money supply which is 13 million and right now inflating with the rate of 10%.
V is the velocity or the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period
T represent the number of transaction in the network.
P represent the price of a Bitcoin.


everything else just Math: P= (M * V)/T so in order that Price raise the Velocity has to grow faster than the number of transactions, this means adoption has to grow really fast and number of transactions must stay lower than the rate of velocity in order for the price to raise.... this is what I thought ?

[mmitech]

what does that mean  P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency


which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

First of all, you're doing it wrong.

P is not the exchange rate of the currency - it's the price of good and services.

With M approximately constant, and with V approximately constant, increasing T means that the cost of good and services priced in Bitcoin will fall, a.k.a the purchasing power of a bitcoin has increased.

ah so with P he meant a price of a good... mmmmm let me try to read in wikipedia the whole definition.

[Dump3er]

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

[blade87]

Bubble's flight has been delayed. Scheduled arrival: November

These are my thoughts exactly.  If a new bubble/rally ever comes that is.

Yes if. I wonder the same. Because if everyone is expecting another bubble, can one happen, at least so soon? It's like the perfect trap. And the longer the delay, the worse things will get in this market. It's looking by the end of September, if we're either going to be at $500-$550 (right on target to approach the next bubble) or somewhere around $400 and looking to fall below that.

At some point this bubble trend will break and when it does it's going to be a long bear market. The last two bubbles did have some very large sell offs before they began (as in very temporarily breaking the long term trend) so it's just so hard to predict right now.

What bubble trend? We are already in a bear market. We have been for 8 months now.

Convert the entire price history of BTC into log scale and you will see. There are 3 very giant steps (bubbles) that have occurred with BTC periodically. We are right about now crossing the long term low trend line of all of it. This is what pretty much everyone is expecting - that BTC will bounce soon (sometime within the next 2 months) and begin a new giant step somewhere to $2000-$5000. But the majority reasoning is that "because it has happened before it will continue to happen" type of mentality is not good reasoning.

With that said BTC has had some great adoption this past year, so I am leaning towards it will happen again, as I hardly consider a few companies accepting BTC anywhere near full potential adoption. BUT, every single past bubble has had a major sell off that occurred right before it took off. That's why it's going to be so damn hard to predict and get right no matter what happens over the next month.

[wachtwoord]

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

Please lockup the definition of a pyramid scheme so perhaps you look less foolish in the future.

[stereotype]

Its like LTC is a leading indicator, these days.  

[wachtwoord]

Its like LTC is a leading indicator, these days.  

No it's not, LTC follows (and one day it will probably stop following even). Anything else is purely coincidental.

[Sandia]

what does that mean  P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency


which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

First of all, you're doing it wrong.

P is not the exchange rate of the currency - it's the price of good and services.

With M approximately constant, and with V approximately constant, increasing T means that the cost of good and services priced in Bitcoin will fall, a.k.a the purchasing power of a bitcoin has increased.

Velocity would also depend on the application:
Store of value would have a very small velocity.  My coins have essentially zero real velocity (moving between my wallets or to an exchange should not count).
Remittance companies could theoretically churn through the same coins over and over again, yielding a high velocity.
As a currency, I would expect velocity to be similar to any other currency.

I don't think we will have an answer until btc has much wider adoption.

[Dump3er]

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

Please lockup the definition of a pyramid scheme so perhaps you look less foolish in the future.

Please read more carefully next time, so perhaps you look less foolish in the future.

[wachtwoord]

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

Please lockup the definition of a pyramid scheme so perhaps you look less foolish in the future.

Please read more carefully next time, so perhaps you look less foolish in the future.

Are you saying your post is not sarcastic? Weren't you the one who said the price was going to zero? If not, I must have mixed you up with someone else.

[ChartBuddy]

Explanation

[inca]

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

Please lockup the definition of a pyramid scheme so perhaps you look less foolish in the future.

Please read more carefully next time, so perhaps you look less foolish in the future.

Are you saying your post is not sarcastic? Weren't you the one who said the price was going to zero? If not, I must have mixed you up with someone else.

Funny how these new troll accounts appear during periods of downward volatility.

[jl2012]

what does that mean  P= (M * V)/T assuming that the velocity will be much lower and transactions much higher then the price will:

a) stay somehow stable if transactions and adoption are almost equal.
b) rise slowly, with no bubbles whatsoever if the adoption is slightly more than the transactions.
c) can even drop a bit if adoption slow down and current holders start using it as a currency


which confirm the theory above "the use of bitcoin will increase 1000x, therefore the price will rise 1000x, I believe the first part, but I don't think the second part follows necessarily", dont you think ?

First of all, you're doing it wrong.

P is not the exchange rate of the currency - it's the price of good and services.

With M approximately constant, and with V approximately constant, increasing T means that the cost of good and services priced in Bitcoin will fall, a.k.a the purchasing power of a bitcoin has increased.

Velocity would also depend on the application:
Store of value would have a very small velocity.  My coins have essentially zero real velocity (moving between my wallets or to an exchange should not count).
Remittance companies could theoretically churn through the same coins over and over again, yielding a high velocity.
As a currency, I would expect velocity to be similar to any other currency.

I don't think we will have an answer until btc has much wider adoption.

Using it as store of value will decrease the T

[oda.krell]

Using it as store of value will decrease the T

Only in a very very far away future (and maybe not even then), if and when crypto/BTC accounts for the entire global money supply. Let's not count on that, mkay?

In the next years, we will see increasing T (my point being: btc rocks as a payment system), and maybe the occasional nutcase (i.e. us ) will throw in a few bucks using it as store of value. The latter doesn't decrease the former in that case.

[DubFX]

Hey guys, was it etherum again who dumped these piles of coins?

[Dump3er]

It's time to launch the rocket, guys! Look! We are building up our launchpad!

This time everything will be different (saying this since 1200, but hopefully nobody has taken notice.) C'mon guys, last chance for cheap coins!!! (as every day). Buy, buy, buy! (Sounds like promotion for a pyramid scheme but, yeah, you know...)

Boooom!

Please lockup the definition of a pyramid scheme so perhaps you look less foolish in the future.

Please read more carefully next time, so perhaps you look less foolish in the future.

Are you saying your post is not sarcastic? Weren't you the one who said the price was going to zero? If not, I must have mixed you up with someone else.

I'm a troll!! I say a lot of things. And of course I'm sarcastic. I would even be sarcastic here, if I were a bull.

But what I said here is, that the bullish emotional impulses, printed to letters are looking like pyramid scheme promotion!

Deny that the price will go down! Deny that I'm sexy and clever (heresy!)! But could you really deny that?!

[abercrombie]

Bitfinex increases allowable margin from 2.5 to 3.33 on Monday.  

That should decrease margin calls and may even spark a rally.