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

[Phillis]

Lil wall on stamp

yeah, its not that big but its something

[spooderman]

and it's gorn.

[JorgeStolfi]

These are mighty strange bubbles. They never fully deflate and keep blowing bigger and bigger!

I believe that the demand that caused the Nov/2013 bubble is nearly gone by now. 

Another bubble that may have deflated completely was the one of Apr--Jun/2011, that lifted the price from ~0.8$ to ~12$.  The segment of the market that created that demand, I suspect, had all but vanished by early 2012.  Its demise was however masked after Nov/2011, when the price was still ~2.3$.  On that date, some other market opened, and the resulting demand lifted the price to ~5$.

It is not certain that each bubble is always bigger than the previous one.

For one thing, the price is not proportional to the demand; the same absolute increase in demand will cause a much larger % rise in price, if the supply is already limited because of previous demand.  That means that the bubbles may not be increasing in terms of extra demand, even of they have increasing effect on price.  It also means that, for example, a market segment that lifted the price by +5$ when it opened in 2011 could cause a drop of -150$ if it closed today.

Moreover, a small surge in price, that would be very significant if it has occurred years ago, may not even be visible if it happened today.  Thus, it may be that bubbles come in all sizes, randomly -- but we only notice a bubble when it is comparable to all the previous bubbles together.  Hence the impression that bubbles are steadily increasing.

Finally, the bubbles of Nov/2011 and May/2014 were smaller than the previous ones.  By the way, both were noticed only because they happened after a substantial deflation of those previous bubbles.  If the Nov/2011 surge (+2.7$) had occurred with the price at 12$, rather than at 2.3$, it would have been ignored as mere "noise".  Ditto for the May/2014 bubble:  a jump from $450 to $600 was quite dramatic, but a jump from 800$ to 950$ would have been just noise.

[NotLambchop]

Fun fact:  BTC price ~same as it was on this date last year.

No more annoying "yeah, but we're still up from last year" posts.

[janos666]

No more annoying "yeah, but we're still up from last year" posts.
img

yeah, but we still didn't crash below last year -> So, you couldn't possibly loose anything, right?
yeah, but we're still up from two years ago -> So, you could actually make a nice profit anyway.
yeah, but... but... we are still going up next year! -> So, you can still profit if you haven't already.
but...

[noobtrader]

Fun fact:  BTC price ~same as it was on this date last year.

No more annoying "yeah, but we're still up from last year" posts.

remember....

frog is not reptile

[ChartBuddy]

Explanation

[NotLambchop]

No more annoying "yeah, but we're still up from last year" posts.
img

yeah, but we still didn't crash below last year -> So, you couldn't possibly loose anything, right?
yeah, but we're still up from two years ago -> So, you could actually make a nice profit regardless.
yeah, but... but... we are still going up next year! -> So, you can still profit if you haven't already.
but...

In a couple of days...

[Walsoraj]

VC investment is of the order of $400 million dollars in the last 24 months for a currency with a market cap of 5 billion dollars. That is massive investment compared to the size of the current userbase and economy. That is investment with expectation of growth.

This amount seems to double at each retelling, like my crypto holdings.    I think I saw 70 million in an article yesterday.

Anyway, many bitcoin services now seem to be making enough money to justify that much investment:

* By my estimates, SMBIT has collected 2--5 M$ in fees from its clients, so far.  When it started in Sep/2013, it also sold some 18'000 old BTC that belonged to its founders, which may have netted them another 2 M$

* Bitpay claimed to have processed 100 M$ of payments in 2013.  I don't know how much they processed in the last 12 months, but they must have made several M$ in fees and trading margins.

* Bitstamp clients trade over 10'000 BTC per day.  Assuming 0.3% average trading fee, that is 30 BTC/day, or ~3.5 M$/year.  Exchanges may also make money from deposit/withdrawal fees, interest on leveraged trading, arbitrage, trading against their clients, etc.

* Large mining enterprises may earn hundreds of BTC per day, and their costs (including equipment) may be 50% of that, or less.  Thus, their net profit may be in the tens of M$/year.

So, there does seem to be enough revenue sources in the bitcoin ecosystem to justify 100 M$ VC investment -- even if it will not grow beyond its present size.

(All the revenue of those companies, by the way, comes out of the pockets of those who are buying and/or using bitcoins now.)

Hard to believe the market was ever capable of absorbing that much btc.

How did Bitpay calculate the 100 million in payments? Buying and selling to itself?  

[devphp]

Please vote:
https://bitcointalk.org/index.php?topic=852011.0

[Mervyn_Pumpkinhead]

VC investment is of the order of $400 million dollars in the last 24 months for a currency with a market cap of 5 billion dollars. That is massive investment compared to the size of the current userbase and economy. That is investment with expectation of growth.

This amount seems to double at each retelling, like my crypto holdings.    I think I saw 70 million in an article yesterday.

Anyway, many bitcoin services now seem to be making enough money to justify that much investment:

* By my estimates, SMBIT has collected 2--5 M$ in fees from its clients, so far.  When it started in Sep/2013, it also sold some 18'000 old BTC that belonged to its founders, which may have netted them another 2 M$

* Bitpay claimed to have processed 100 M$ of payments in 2013.  I don't know how much they processed in the last 12 months, but they must have made several M$ in fees and trading margins.

* Bitstamp clients trade over 10'000 BTC per day.  Assuming 0.3% average trading fee, that is 30 BTC/day, or ~3.5 M$/year.  Exchanges may also make money from deposit/withdrawal fees, interest on leveraged trading, arbitrage, trading against their clients, etc.

* Large mining enterprises may earn hundreds of BTC per day, and their costs (including equipment) may be 50% of that, or less.  Thus, their net profit may be in the tens of M$/year.

So, there does seem to be enough revenue sources in the bitcoin ecosystem to justify 100 M$ VC investment -- even if it will not grow beyond its present size.

(All the revenue of those companies, by the way, comes out of the pockets of those who are buying and/or using bitcoins now.)

Bitpay, exchanges, miners... all want to earn from bitcoin. The final bill will be paid by the hodlers.

[JorgeStolfi]

How did Bitpay calculate the 100 million in payments? Buying and selling to itself?  

Perhaps.  It is a privately funded company, so they are not required to publish their accounting, and may be arbitrarily creative with their interpretation of it.

Umberto Eco observed that, if you want to know how was life in ancient times, you need only read what was strictly forbidden by the laws of the time.  For example, there was an article in the bylaws of the Templars that forbade the knights from raising chickens inside the headquarters of the Order.  Another article prohibited a knight to insult his officer, dump the armour and weapons at his feet, and stomp out of the room, slamming the door.

Now, it seems that Bitpay insists that they are not an exchange, and thus the client should not use them to convert bitcoins to dollars, by sending a "payment" to himself.  They demand all payments to be to actual merchants, in exchange for some goods or services.  Therefore...   

By the way, in this thread it is claimed that an infamous manufacturer or mining equipment used Bitpay to launder 1 M$ worth of bitcoin that was mined on their customers' machines -- specifically, under pretense of advance payment of a large purchase by a mining pool.

[ChartBuddy]

Explanation

[spooderman]

I don't get it. 20k ask wall? Eaten straight away. 7k to over 500? nope.

[hmmkay]

I don't get it. 20k ask wall? Eaten straight away. 7k to over 500? nope.

20k @ cheap price without slippage is more appealing to buy than being the one that has to pay all the way up to 500+ for the final amount of coins.

[octaft]

I don't get it. 20k ask wall? Eaten straight away. 7k to over 500? nope.

It's a lot tougher for them to afford when they're not buying them from themselves.

[Blue]

there is a 400er bid wall on bitfinex.....


... and it´s gorn.




[ another subspecies of our beneficient lizard overlords,
this one obviously has a sense for fashion ]

[spooderman]

lol true

[ChartBuddy]

Explanation

[oda.krell]

I respectfully disagree, we will not ever see 100 USD again, that is if we ever see it fall below - that would be the end of crypto. But this will not happen in a thousand years.

I do not know whether the price will go below 100$, but it is not impossible. 

The current price is basically the result of three major surges in demand:

(1) Jan-Apr 2013 (that increased the price by about +125$, from ~15$ to ~140);
(2) Oct-Nov 2013 (increased by about +660$, from ~140$ to ~800$), and
(3) June 2014 (about +150$, from ~450$ to ~650$).

The first two events left the price at ~800$ in Jan/2014.  From Feb to May the price fell by about -350$; the most likely cause is partial loss of the demand that caused bubble 2, the only one that seems large enough to cause such a drop.  That would explain also the continuing drop since Jun/2014 (by about -300$).

If bubble 2 (only) deflates completely, the price may fall to 275$.  A partial deflation of the other two bubbles would be enough to take the price below 100$.

I suspect that bubble 1 is Chinese too, but in the special economic zones, and perhaps with a different demographics from bubble 2.  I still don't have a clue about bubble 3, but I see signs that it may be deflating too.

Oh, wow.

I gave up on arguing with you about your various misconceptions about how markets work, or your almost comical hunt for "causes" of local price increases, but this one is too good to pass on:

Current price is the result of "three bubbles", starting Jan 2013?

So the entire trading history of late 2010 to late 2012, when price discovery was truly bootstrapped, with maybe the first major milestone being dollar parity, is just a historical footnote? No effect on price today?

Three discrete events causally determine today's price. Got it.