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Author Topic: Are early adopters stabilising the market?  (Read 2000 times)
Gandlaf
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June 16, 2011, 09:53:26 PM
 #1

I would really be interested in hearing your opinion on this assumption:

From what I have seen over the last months, it looks like early adopters sold into the first craze(extreem upturn towards USD30+). This probably wasn´t even a bad idea, given the press coverage provided by this boom and crash episode.
Whilst early adopters always had the power to limit upwards moves in the bitcoin exchange rate(due to their vast holdings of BTC), now, after the USD 30+ rally they probably also have the cash to mitigate/compensate for downward movements.
I would assume that many are following an adaptive +10%/-10% strategy; essentially buying or selling into the market amounts that clearly stabilize the exchange rate, when these limits(or a different threshold) are breached.
It looks like the early adopters are making this currency viable for merchants!

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June 16, 2011, 10:01:43 PM
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I really doubt your hypothesis. It's speculators that are stabilizing the market. Speculators know how to profit from market moves in either direction using what's known as a pair trade.  Competition between speculators reduces volatility as each seeks to cash in on progressively smaller swings. When the market flatlines, some speculators leave and volatility returns. It's cyclical.

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Gandlaf
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June 16, 2011, 10:07:10 PM
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I really doubt your hypothesis. It's speculators that are stabilizing the market. Speculators know how to profit from market moves in either direction using what's known as a pair trade.  Competition between speculators reduces volatility as each seeks to cash in on progressively smaller swings. When the market flatlines, some speculators leave and volatility returns. It's cyclical.

Completely agree, that this may very well be a valid explanation, I was just very suprised by the move from 30-50% swings to approximately 1BTC+ swings within a day or so.

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miner249er
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June 16, 2011, 10:14:28 PM
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A flat price/low volume generally indicates a mature bull market price point.
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June 16, 2011, 10:23:50 PM
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You are both right to some degree.  Most early adopters are speculators.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
Gandlaf
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June 16, 2011, 10:25:15 PM
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A flat price/low volume generally indicates a mature bull market price point.

Yes, but the volume isn´t really low though and this is not actually happening at or near the peak but ~30% below.

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Gandlaf
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June 16, 2011, 10:32:05 PM
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You are both right to some degree.  Most early adopters are speculators.

I´m not sure I entirely agree.
Granted, most early adopters are speculators in so far as they were willing to spend time and effort on a system/concept that was far from being guaranteed to be successful.
On the other hand(or maybe precisely for that reason) many(most?) of the early adopters seem to be ´true believers´; i.e the kind of people who are prepared to(and have the means to) ´take a short term hit´ in order to see the concept succeed in the long to medium term.
Hence my hypothesis.

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June 16, 2011, 10:50:12 PM
 #8

A flat price/low volume generally indicates a mature bull market price point.

Yes, but the volume isn´t really low though and this is not actually happening at or near the peak but ~30% below.

Not sure why you consider this low volume. Over eight million bitcoins changed hands in the last twenty four hours, more than even exist, so some had to have bent sent several times.

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Gandlaf
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June 16, 2011, 11:04:08 PM
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A flat price/low volume generally indicates a mature bull market price point.

Yes, but the volume isn´t really low though and this is not actually happening at or near the peak but ~30% below.

Not sure why you consider this low volume. Over eight million bitcoins changed hands in the last twenty four hours, more than even exist, so some had to have bent sent several times.

Not sure whom you are refering to here. I agreed to the general premises of flat episodes being possible at/near the peak of a bull market.
But this is quite obviously not the case in this instance, as stated in my previous post.

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Timo Y
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June 16, 2011, 11:11:26 PM
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Not sure why you consider this low volume. Over eight million bitcoins changed hands in the last twenty four hours, more than even exist, so some had to have bent sent several times.

They're not changing hands.  

The heist from allainvain has scared early adopters into to moving their wealth to fresh offline wallets.


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MoonShadow
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June 16, 2011, 11:14:34 PM
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Not sure why you consider this low volume. Over eight million bitcoins changed hands in the last twenty four hours, more than even exist, so some had to have bent sent several times.

They're not changing hands.  

The heist from allainvain has scared early adopters into to moving their wealth to fresh offline wallets.



Twice?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
billyjoeallen
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June 16, 2011, 11:18:59 PM
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Not sure why you consider this low volume. Over eight million bitcoins changed hands in the last twenty four hours, more than even exist, so some had to have bent sent several times.

They're not changing hands.  

The heist from allainvain has scared early adopters into to moving their wealth to fresh offline wallets.

That "heist" is an unconfirmed rumor. more FUD.

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Vince Torres
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June 16, 2011, 11:28:30 PM
 #13

I would really be interested in hearing your opinion on this assumption:

From what I have seen over the last months, it looks like early adopters sold into the first craze(extreem upturn towards USD30+). This probably wasn´t even a bad idea, given the press coverage provided by this boom and crash episode.
Whilst early adopters always had the power to limit upwards moves in the bitcoin exchange rate(due to their vast holdings of BTC), now, after the USD 30+ rally they probably also have the cash to mitigate/compensate for downward movements.
I would assume that many are following an adaptive +10%/-10% strategy; essentially buying or selling into the market amounts that clearly stabilize the exchange rate, when these limits(or a different threshold) are breached.
It looks like the early adopters are making this currency viable for merchants!

+1

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Timo Y
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June 16, 2011, 11:49:07 PM
 #14

That "heist" is an unconfirmed rumor. more FUD.

You are not seriously suggesting that an old forum member faked the heist in order to crash the price? Are you?  

That wouldn't even make any sense.  The fact that a hacker can steal a plaintext wallet.dat is not exactly a secret. This vulnerability has been discussed ad nauseum on this forum and consensus was reached months ago, that it is a good idea to keep a separate savings wallet. Even allinvain admitted that he knew his setup was highly unsafe before his coins were stolen.

The heist revealed nothing that wasn't already known, besides it's not a bitcoin vulnerability but an OS vulnerability.  Thus the market should ignore such news ... unless ... the market is dominated by ignorant, immature amateurs who don't understand bitcoin and are swayed by whatever they read on Gawker.

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Gandlaf
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June 16, 2011, 11:59:12 PM
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This seems to be interesting:

Apart from that, I would actually be interested to hear some perspectives on the hypothesis I originally proposed. I know the ´heist´is a very interesting subject, but not exactly the topic of this thread.


The location to post for these matters would seem to be:
http://forum.bitcoin.org/index.php?topic=16457.380

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billyjoeallen
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June 17, 2011, 12:02:12 AM
 #16

That "heist" is an unconfirmed rumor. more FUD.

You are not seriously suggesting that an old forum member faked the heist in order to crash the price? Are you?  

That wouldn't even make any sense.  The fact that a hacker can steal a plaintext wallet.dat is not exactly a secret. This vulnerability has been discussed ad nauseum on this forum and consensus was reached months ago, that it is a good idea to keep a separate savings wallet. Even allinvain admitted that he knew his setup was highly unsafe before his coins were stolen.

The heist revealed nothing that wasn't already known, besides it's not a bitcoin vulnerability but an OS vulnerability.  Thus the market should ignore such news ... unless ... the market is dominated by ignorant, immature amateurs who don't understand bitcoin and are swayed by whatever they read on Gawker.


A more plausible scenario is that someone stole his identity. It's easier to hack a bitcoin.org account than someone's OS.

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RomertL
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June 17, 2011, 12:24:16 AM
 #17

That "heist" is an unconfirmed rumor. more FUD.

You are not seriously suggesting that an old forum member faked the heist in order to crash the price? Are you?  

That wouldn't even make any sense.  The fact that a hacker can steal a plaintext wallet.dat is not exactly a secret. This vulnerability has been discussed ad nauseum on this forum and consensus was reached months ago, that it is a good idea to keep a separate savings wallet. Even allinvain admitted that he knew his setup was highly unsafe before his coins were stolen.

The heist revealed nothing that wasn't already known, besides it's not a bitcoin vulnerability but an OS vulnerability.  Thus the market should ignore such news ... unless ... the market is dominated by ignorant, immature amateurs who don't understand bitcoin and are swayed by whatever they read on Gawker.


A more plausible scenario is that someone stole his identity. It's easier to hack a bitcoin.org account than someone's OS.

Not sure I believe it either. It's just too much money to store that way. Anyone here had large quantities stored in one place without encryption or anything? (Don't worry, I'm not going to ask were haha).

But on the other hand, one isolated incident isn't likely to alter the exchange-rate either. That's probably even less effective than the Sell sell sell posts... The current fall is probably the sell-before-weekend-buy-after-syndrome.

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Ruxum
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June 17, 2011, 01:58:29 AM
 #18

Everyone here in this forum and everyone that uses Bitcoin is an early adopter!

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June 17, 2011, 03:24:53 AM
 #19

Everyone here in this forum and everyone that uses Bitcoin is an early adopter!

guess we're still kind of early, but can only guess since we don't know how long the bitcoin will last. If we choose to believe the most optimistic guys in this forum we're definitely all early adopters...

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