Are early adopters stabilising the market?

[Gandlaf]

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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[billyjoeallen]

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.

[Gandlaf]

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.

[miner249er]

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

[MoonShadow]

You are both right to some degree.  Most early adopters are speculators.

[Gandlaf]

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.

[Gandlaf]

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.

[billyjoeallen]

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.

[Gandlaf]

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.

[Timo Y]

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.

[MoonShadow]

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?

[billyjoeallen]

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.

[Vince Torres]

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

[Timo Y]

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.

[Gandlaf]

This seems to be interesting:

Possible way (and most likely) way the coins were stolen:

http://www.symantec.com/security_response/writeup.jsp?docid=2011-061615-3651-99&tabid=2

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

[billyjoeallen]

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.

[RomertL]

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.

[Ruxum]

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

[RomertL]

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...