Irrational

[SAQ]

How could the price shoot up from around 70 to 135 when the fundamentals could not be worse - bitcoin-24 halted, bitfloor shuts down and blockchain was down? Could people really rally because of that article about Western Union on fox?

Or, was the price of around 260 actually reflecting demand and the freefall to 50 was not because of some bubble but merely a technical glitch?

I suppose one rational explanation could be that most people buy bitcoins and hold. This makes the amount of bitcoins available even less.  Since a lot of people are still finding out about bitcoins or re-visiting bitcoins following all the media exposure, even more people want bitcoins. Translating to less sellers and more buyers. Hence the price is going up even though the lifeblood of the currency - exchanges - are being shut.

I just find it a bit amazing that people are willing to pay 119 for 1 bitcoin with all these exchanges being shut and DDos'ing and hacking and considering how difficult it is to even buy the thing.

[MOB]

Have you considered:

1.  Fundamentals have very little to do with how BTC is traded at this time
2.  People are irrational
3.  People panic buy

[dohse]

HI just find it a bit amazing that people are willing to pay 119 for 1 bitcoin with all these exchanges being shut and DDos'ing and hacking and considering how difficult it is to even buy the thing.

Sometimes forbidden fruit tastes sweeter.

But seriously, I was wondering today how much the surge in price over the last 24 hours is due to more people trading on Gox because they were forced there by the closure of other exchanges. I haven't thought too long about it but if you have more buyers forced into an exchange it could increase demand enough to raise the price. But this jump seems to be more than that. Another alternative is once we hit $100 all of the people on the sideline waiting for the green light decided it was time to get back on.

[checkers6676]

Fewer exchanges = bottleneck on supply = less supply per unit of demand = higher prices ? (just speculating here)


Also, the bubble/crash may not have been nearly as severe if it wasn't coupled with rampant DDoSing of MtGox and other exchanges--it may not have popped at all, we'll never know.

In my own case, I bought in during the previous rally at 57, and didnt sell before the pop. I bought at 57 with the hope of a 500-1000USD bitcoin. So to me, seeing the bubble go to 266 as rapidly as it did, drop to 50ish, and then continue on up to 120 (now) is to me a bullish sign. It shows me that I'm still in for a reasonable low, and it shows me that the entirety of the bubble wasn't just a pump prior to a dump...people are very willing to pay 100+ values for a bitcoin, and are making money doing so (if they have sells set in on the way up, as i do this time considering i didn't sell before the crash).

[superduh]

fundamentals are fine. what you described are called hiccups


let me put it another way. by the time it becomes RATIONAL the price of a bitcoin will be 10,000+

[Photonfrog]

Which other potential disruptive and already established technologies can you invest in as an ordinary internet user these days?

If you compare bitcoins with a fledgeling tech startup its an incredible success. The evaluation is artificially depressed through some external forces. (Possibly early adopters with a few too many coins still?)

Bitcoins do is in some sense provide a chance at buying facebook shares in 2005, or Google shares in 1999, before anyone really knew what was going to happen. But bitcoins are also a rarely potent technology. The real question is why you would be selling, desperate for fast cash or highly risk averse perhaps?

[JimiQ84]

for me, fundamentals are good enough for 300 USD/BTC. That's right now. It may change tomorrow, or in a month.

[jerkoff]

price represents the balance between the psychology and emotions of participating parties as a whole. Price goes too high, people stop buying and others sell. Price drops lower and buyers that previously thought it was too high become active. Of course there is also a time factor, people look at the short term and are have forgotten the $30 price of february, and will soon forget the $260 high.

[molecular]

How could the price shoot up from around 70 to 135 when the fundamentals could not be worse - bitcoin-24 halted, bitfloor shuts down and blockchain was down? Could people really rally because of that article about Western Union on fox?

I hold a diametrically opposed view.

It might be selective perception, but I see mainly good news and especially news with wide reach to untapped reservoirs.

Some examples (I could never give a complete list, no way to keep track of everything any more)

• Jeff Berwick constantly on TV in the states promoting bitcoin and his ATM. Great story!
• Max Keiser everywhere he is (Alex Jones, Russia Today,...) promoting bitcoin.
• James Turk and other metal dudes seemingly coming around.
• More generally: Mainstream TV coverage (e.g. colbert report), print coverage (I see german print media as an example falling over themselves trying to get a grasp on bitcoin). And not even negative at all despite the shit that happened (fork, mtgox engine lag, crash, bitfloor shutdown).

How could the price not shoot back up? We're not in a bear market. We suffered a very panic-driven hard over-correction and the rebound will be rather quick. Then we'll shoot past 266 to 450ish. Much quicker than most seem to think. My guess is In May or June.

Bitcoin is fundamentally a good thing and people know it.

[BitcoinAshley]

Let me give you a little lesson in Bitcoin emotion.

It is very easy to list all the bad news, act as if it's the only news or is overwhelming, and ignore or not bother to find the good news. This is called "FUD" (An acronym that stands for "fear, uncertainty, and doubt.")

It is EQUALLY easy to list all the GOOD news, ignoring or not bothering to look up the bad news. This is called "irrational exuberance".

The problem is, with either approach, the severely biased "fundamentals" you present have bitcoin either (a) skyrocketing to over $9,000/mBTC, or (b) crashing to $5. Problem? Bitcoin is doing NEITHER at the moment!

So please, good people, consider the good news ALONG with the bad news, and let the debate be "does the good news outweigh the bad news or vice versa?" rather than "Here's all the [good/bad] news, why isn't bitcoin [spiking/crashing].

 

I'm sure people will come along and present decent amounts of good news, such as Colbert appearance (I list this not because I personally think it's "good news," but because it's a good example of how we can even debate whether a specific press item is "good news" or "bad news," see the Colbert thread for discussion), WU/MG announcement, a couple moderately-significant web adopts such as MetART and OKCupid, stats from various companies such as Bitpay, Gox, other exchanges, new exchanges, VC announcements, press, etc.

So when we have a realistic list of the significant good news ALONG WITH the significant bad news stored in everyone's mental RAM, we can have a legitimate discussion about what bitcoin might do in the future... rather than "Here's all my FUD/Irrational exuberance, why isn't USD/BTC tanking/on the moon?"

[BitSmile]

Bitcoin is going mainstream, really. If you only look here in the forum you only see a few faces, but there's a lot of people buying, and using, that don't even know of the forum. I was using bitcoin one year before registering in this forum. My mother is getting into it, maybe for use in silk road lol, and today, a great article on bitcoin came on a regional newspaper, explaining some of the fundamentals and how if it gets mainstream, it maybe will crash the fiat currencies(everyone here reads that newspaper) and I live in relatively unpopulated area in Portugal. Of course, the mainstream media isn't favorable to it, yet. But they will be forced to. Trust me, it's getting mainstream, volatility aside. The volatility means nothing, people believe it the same way. Satoshi is my hero  

[Manticore]

How could the price shoot up from around 70 to 135 when the fundamentals could not be worse - bitcoin-24 halted, bitfloor shuts down and blockchain was down? Could people really rally because of that article about Western Union on fox?

I hold a diametrically opposed view.

It might be selective perception, but I see mainly good news and especially news with wide reach to untapped reservoirs.

Some examples (I could never give a complete list, no way to keep track of everything any more)

• Jeff Berwick constantly on TV in the states promoting bitcoin and his ATM. Great story!
• Max Keiser everywhere he is (Alex Jones, Russia Today,...) promoting bitcoin.
• James Turk and other metal dudes seemingly coming around.
• More generally: Mainstream TV coverage (e.g. colbert report), print coverage (I see german print media as an example falling over themselves trying to get a grasp on bitcoin). And not even negative at all despite the shit that happened (fork, mtgox engine lag, crash, bitfloor shutdown).

How could the price not shoot back up? We're not in a bear market. We suffered a very panic-driven hard over-correction and the rebound will be rather quick. Then we'll shoot past 266 to 450ish. Much quicker than most seem to think. My guess is In May or June.

Bitcoin is fundamentally a good thing and people know it.

I don't see anything fundamental in this list, which consists of anecdotal media references. I agree that media will continue to play the lead role in pricing Bitcoin. If any of the recent developments had happened quietly, without major press releases, we would still be hovering around $13.50.

I guess if there is ever an actual big piece of news, we can rest assured that the price would rise to astronomical levels. The Western Union non-news piece that moved us substantially was a virtual repeat of an interview that happened over a month ago. They've already said they're watching Bitcoin and may revisit it after it matures sometime in the distant future.

Many point to the types of charts listed below as fundamental evidence.

http://sourceforge.net/projects/bitcoin/files/stats/timeline?dates=2013-03-19+to+2013-04-19
http://www.google.com/trends/explore#q=Bitcoin&date=today%201-m&cmpt=q

I love the Bitcoin concept but hate (understatement) that it moves so erratically. I would love nothing more than to see high net-worth individuals begin utilizing Bitcoin in their portfolios......but it seems that we can only move in a bizarre and erratic manner based solely on press releases of little substance. I keep waiting and hoping it will settle down and at least pretend to be rational. Such low volume propels it into the stratosphere.

I am very close to giving up on Bitcoin, at least temporarily, as an investment vehicle. I may revisit it down the road if it truly attains fundamentals outside of the press release circuit. The media pump is doing more harm than good. I initially joined this forum to find out what everyone here was all about and have kind of been sucked into posting regularly, often regarding the over-exuberance (IMO).

If I am correct and we move down to rational levels and stay there for awhile, I will revisit Bitcoin. If I am completely wrong and we move up much higher and, for some magical reason, finally enjoy a modicum of stability (doubtful), I will revisit Bitcoin. If we actually stabilize here for awhile, I may revisit. At the present, there is too much risk to do anything with this.....I cannot gamble solely based on media hype and hyper-speculation. If we were much lower, it might be worth the gamble.

My main problem is that Met-Art, OKCupid, Bitpay, the VCs, etc etc, have become much less important than the accompanying press releases. If the CEO of Bank of America owned a single bitcoin and issued a press release stating just that, we'd apparently go to $10K.

[MAbtc]

Hmm.

[byronbb]

These are not fundamentals.

[Wuji]

When we went over $100 last time I was a bear as the price was rising too fast and was afraid of the bubble.  However, I'm now feeling a lot better about buying at $71 and may buy more on the slow rise.  I think the new fundamental on Bitcoin is not its current use to buy and sell goods.  I think rather than just speculators we are now seeing a lot of people from Cyprus, Spain, other EU countries, China and Argentina putting money into Bitcoin as a safer currency.  This should help drive adoption in those areas and could continue to hold the price up.  I hope it doesn't rise too fast and create a new bubble. 

If people slowly start putting wealth in Bitcoin it will quickly start getting used more for international money transfers.  I'm still not a huge bull expecting $200 next week (I hope not) but, I do feel more confident now that it is becoming a safe haven currency.  During the bubble rise I was blasting BTC for lacking fundamentals but, this transfer of wealth has things looking better IMHO.

[gw4tt]

I would buy right now if there was a super duper easy way to buy bitcoins for the average joe. There's still tons of issues with bitcoin that need to be worked out before it can even think about going "mainstream" - and right now no one has provided a solution for those issues.

Right now everything is pure speculation and media hype. Things haven't changed all that drastically from 2011 yet all of a sudden it's worth over $100.

[Catacombkid]

I think if anything fundamentally needs to change or currently is changing, it's liquidity. The wealth is getting spread much farther between people as more people are entering the market, which controls the volatility of the market. As this aspect continues to grow and we can see more buy and sell walls and no 50% drops or gains in a matter of hours, confidence to not bail so quickly will be in place and then we can start really worrying about the technical application prospect of bitcoin.

[Wuji]

I think if anything fundamentally needs to change or currently is changing, it's liquidity. The wealth is getting spread much farther between people as more people are entering the market, which controls the volatility of the market. As this aspect continues to grow and we can see more buy and sell walls and no 50% drops or gains in a matter of hours, confidence to not bail so quickly will be in place and then we can start really worrying about the technical application prospect of bitcoin.

That is a good point and I think liquidity will get better with time.  Demand drives change and innovation.

[keewee]

https://i.imgur.com/Kfl6RSp.jpg

Hmm.

You need to ignore the last value. The increase in interest has been increasing nicely. Ignoring the period of the price spike to $266 there has only been a small drop off recently, this could pick up again if the bitcoin price recovers sooner rather than later

[superduh]

I don't see anything fundmental in this list, which consists of anecdotal media references. I agree that media will continue to play the lead role in pricing Bitcoin. If any of the recent developments had happened quietly, without major press releases, we would still be hovering around $13.50.

I guess if there is ever an actual big piece of news, we can rest assured that the price would rise to astronomical levels. The Western Union non-news piece that moved us substantially was a virtual repeat of an interview that happened over a month ago. They've already said they're watching Bitcoin and may revisit it after it matures sometime in the distant future.

Many point to the types of charts listed below as fundamental evidence.

http://sourceforge.net/projects/bitcoin/files/stats/timeline?dates=2013-03-19+to+2013-04-19
http://www.google.com/trends/explore#q=Bitcoin&date=today%201-m&cmpt=q

I love the Bitcoin concept but hate (understatement) that it moves so erratically. I would love nothing more than to see high net-worth individuals begin utilizing Bitcoin in their portfolios......but it seems that we can only move in a bizarre and erratic manner based solely on press releases of little substance. I keep waiting and hoping it will settle down and at least pretend to be rational. Such low volume propels it into the stratosphere.

I am very close to giving up on Bitcoin, at least temporarily, as an investment vehicle. I may revisit it down the road if it truly attains fundamentals outside of the press release circuit. The media pump is doing more harm than good. I initially joined this forum to find out what everyone here was all about and have kind of been sucked into posting regularly, often regarding the over-exuberance (IMO).

If I am correct and we move down to rational levels and stay there for awhile, I will revisit Bitcoin. If I am completely wrong and we move up much higher and, for some magical reason, finally enjoy a modicum of stability (doubtful), I will revisit Bitcoin. If we actually stabilize here for awhile, I may revisit. At the present, there is too much risk to do anything with this.....I cannot gamble solely based on media hype and hyper-speculation. If we were much lower, it might be worth the gamble.

My main problem is that Met-Art, OKCupid, Bitpay, the VCs, etc etc, have become much less important than the accompanying press releases. If the CEO of Bank of America owned a single bitcoin and issued a press release stating just that, we'd apparently go to $10K.

you mean how stocks, bonds, gold and everything else in the world goes UP and DOWN based on RUMORS, NEWS, PR ETC
i don't think you understand that is exactly how the real world actually works. not just bitcoins but everything
it seems you are confused