Bears, Put Your Money Where Your Mouth Is

[Kazu]

I've talked about this in several threads before but I want to make a thread dedicated for it.

Looking for Bears that want to bet against bitcoin.

I am confident in Bitcoin in the days to come so I am looking to express this view without daytrading. Thus I will provide people with the option to short bitcoin with 'binary options' (i.e, what financial institutions use as a fancy way of saying 'bets') so you bears can profit from your 'superior knowledge.'

I offer 2 simple ways of making your bet:

Down: You bet Bitcoin will go down. If the Gox price is lower (even by 1 cent!) than when you make the bet after a designated period of time, you will double your money. If not, you will lose your money.

One-touch: You bet Bitcoin will touch a specific value (lower than the current) within the next designated time period. If it does, you will double your money. If not, you will lose your money. This is useful because even if we go into what you bears call "bull traps" you still make money.

For one-touch, I feel a daily trade is more easily tracked because the "low" is clearly available on gox. Today, the market in one day had a ~25% range of values (from $109 to $136). In order for it to be considered a possible "bear" market, more than half of this variance must be over half of this range. So, I will make the target value for one-touch 13% lower than the current price with a time period of 24 hours as a starting offer.

Obviously I am willing to negotiate and take offers. As for trust, I can assure you I am trustworthy and require users that I personally do not trust (don't take it personally, I probably just haven't got to know you yet) to give me your Bitcoins before starting the bet. In many cases I assume we can go on the honor system and pay each other after the bet is complete. I encourage you to start with a small bet to get to know you can trust me.

This offer may be removed or changed whenever I personally feel. Obviously I will still honor outstanding bets. No need to send me a PM, just post in this thread so the forum can back us up in case of a conflict which increases trust. All prices both opening and closing are based on gox price.

PROFIT CALCULATIONS

-'DOWN' bets:
current price/strike price : 1
Example:
If you bet 1BTC that the price would close lower than 100 when the price is 125, and it did, you would get 1BTC*(125/100) = 1.25BTC as your profit.

-Daily 'STRIKE' bests:
You will double your money if the price reaches 13% lower than the current price within a time period of 24 hours.

[1714194311]

1714194311

[smoothie]

I can already hear the crickets. But I hope someone takes you up on your bet....entertainment lol

[Brunic]

I'm a bear, and the idea seems fun but... how am I supposed to bet? I don't have any BTC, I sold them all!  

*EDIT*
My post may seem as a joke, but I'm serious. I'm thinking the price will go down the drain, I'm out of the market for the time being and I'm sitting on my pile of cash waiting for the price to go down. A real bear shouldn't have any BTC left to bet.

[Kazu]

I'm a bear, and the idea seems fun but... how am I supposed to bet? I don't have any BTC, I sold them all!  

Step 1: Set up bet with me.
Step 2: Buy bitcoins (which you've hedged out of anyway because of your bet with me, don't worry, your not 'really' buying coins).
Step 3: Lose those bitcoins in your bet.

Do you have any money in any exchange ever?

[Kazu]

EDIT: Ignore, issue resolved.

[Kazu]

Also for further reference, I've created a custom address for this, 1F6yaGAsfe6LvmGf6sdKGY8JJEXPsEMbcR, which I'll be using to receive all funds.

[Kazu]

EDIT: Ignore, issue resolved.

[Brunic]

I'm a bear, and the idea seems fun but... how am I supposed to bet? I don't have any BTC, I sold them all!  

Step 1: Set up bet with me.
Step 2: Buy bitcoins (which you've hedged out of anyway because of your bet with me, don't worry, your not 'really' buying coins).
Step 3: Lose those bitcoins in your bet.

Do you have any money in any exchange ever?

I think your step 3 is wrong

But seriously, I don't see how it is an interesting deal. We make a bet of 10 BTC at 100$ each for example. If I win, I double my money (20 BTC)....but I win only if the price goes down. If the price goes down 50% and more, I'm not making any money on the original deal. Getting 20 BTC at 50$.....why am I betting in the first place?

But in your case, if you win, it means that the price went up. So, you're winning 20 BTC of more value than the original BTC of the deal.

I don't see how your bet offer can be profitable for any bear. The margin where he can win and profit is small (between minus 1% and 50% of the original price) while you have an infinite margin where you can win and profit.

[Kazu]

I'm a bear, and the idea seems fun but... how am I supposed to bet? I don't have any BTC, I sold them all!  

Step 1: Set up bet with me.
Step 2: Buy bitcoins (which you've hedged out of anyway because of your bet with me, don't worry, your not 'really' buying coins).
Step 3: Lose those bitcoins in your bet.

Do you have any money in any exchange ever?

I think your step 3 is wrong

But seriously, I don't see how it is an interesting deal. We make a bet of 10 BTC at 100$ each for example. If I win, I double my money (20 BTC)....but I win only if the price goes down. If the price goes down 50%, I'm not making any money on the original deal. Getting 20 BTC at 50$.....why I'm betting in the first case?

But in your case, if you win, it means that the price went up. So, you're winning 20 BTC of more value than the original BTC of the deal.

I don't see how your bet offer can be profitable for any bear. The margin where he can win and profit is small (between minus 1% and 50% of the original price) while you have an infinite margin where you can win and profit.

The advantage always goes to the bull because the bull can express his position without the help of the bear but the bear can't do so without the help of the bull. Still, I agree its unfair that the bear can actually lose money if the price goes down too much. Thus, for "down" bets (for one-touch I will send the BTC when the price hits the one-touch so they aren't exposed to additional downside risk) I'll 'hedge' you out of BTC: If you win, and the price goes down I'll cover the loss.

Bottom line: No matter what, if you win the bet, you will win money. I'm not trying to pull any dick shit (other than take advantage of the bad predictions of bears)!

The other direction is perfectly fair, as if I win, I have the right to do what I want with your money, and what I want to do is buy bitcoins.

[MatTheCat]

and so the informal Bitcoin derivatives trade was born.

How about, we 'bears' just sit and watch what happens.

If we are correct, and over time, Bitcoin finds a base at a much lower price range, then at that point, providing we think the fundamentals for future growth are still in good shape (I am talking steady and/or thriving existing or newly established Bitcoin market places such as Silk Road), then we enter at that price point, whatever it may be.

If we are wrong, and this time it is indeed 'different', and the price stabilises between $100-$150, before taking off into the stratosphere never to return, with the whole world chomping at the bit to get hold of some Bitcoins no matter what the price, then we miss out.

In December 2012, it was not provident to be a bear as happenings have proven. The bulls however, I would suggest owe their good fortune more to luck other than to any personal insight or genius on their own part. The exponential price explosion was I suspect caused by relatively few players as opposed to any of the other reasons that are often cited on forums such as this. In short, nobody could have predicted what happened.

Now however, that we have had the hyperbolic rise and crash, an almost endless history of graphs and charts of previous asset price bubbles give a pretty good indication of what is to come some time down the line. Of course, there is always the chance that there is some other X factor at work here and that this time, it really is different. But this wouldn't be the side of the argument that the risk averse money would choose.

[Kazu]

and so the informal Bitcoin derivatives trade was born.

How about, we 'bears' just sit and watch what happens.

If we are correct, and over time, Bitcoin finds a base at a much lower price range, then at that point, providing we think the fundamentals for future growth are still in good shape (I am talking steady and/or thriving existing or newly established Bitcoin market places such as Silk Road), then we enter at that price point, whatever it may be.

The difference is, that you will be making money while you wait, and that if you choose you will never have to long bitcoin at all.

[Birdy]

Those bets could be cheated at, just a warning for bigger bets.

If you have enough BC and bet a lot if BCs on BCs going down, you can throw a pig pile on the market to let them go down.
(or if you have enough cash, buy BCs to let them go up)

[Kazu]

Those bets could be cheated at, just a warning for bigger bets.

If you have enough BC and bet a lot if BCs on BCs going down, you can throw a pig pile on the market to let them go down.
(or if you have enough cash, buy BCs to let them go up)

You'd have to have an ass load of money to do so, and even if you did, you'd probably lose more than you'd win anyways.

[Elwar]

Or the bears could bet against the price of Bitcoin going up to $10,000 in the next few years:

http://betsofbitco.in/item?id=1532

[Ekaros]

Or the bears could bet against the price of Bitcoin going up to $10,000 in the next few years:

http://betsofbitco.in/item?id=1532

Bad bet, I have no trust in USD

These kinds of bets are rather complex to get fair...

[ElectricMucus]

How about this one:

If price goes over USD250 first I owe you USD250
If price goes under USD50 first you owe me BTC5

[flyhouse]

Ah... Greed makes the world go round. And sometimes broke 

[adraza]

I would like to have a bet like this, but in $. Meaning that I like the Bitcoin infrastructure for sending and receiving value, but right now I can not trust the stability of BTC (what stability?).

For example a 10$ bet that after x hours the price will be lower.
Using MtGox price as enter price, exit price and of course outcome price.

And as far as I know BTC is quoted much detailed than 'cents'.

Considering that I trust you for now, we have to settle the time correlations.

[Kazu]

I would like to have a bet like this, but in $. Meaning that I like the Bitcoin infrastructure for sending and receiving value, but right now I can not trust the stability of BTC (what stability?).

For example a 10$ bet that after x hours the price will be lower.
Using MtGox price as enter price, exit price and of course outcome price.

And as far as I know BTC is quoted much detailed than 'cents'.

Considering that I trust you for now, we have to settle the time correlations.

Very well, I will still complete the transactions in bitcoins however as I have no other way of paying you. I will scale your winnings or losings according to current price of bitcoin.

Which bet type do you want?

[adraza]

So basically I will bet 1$ that the Mtgox price will be lower than now after exactly 1 hour.
I think that https://data.mtgox.com/api/2/BTCUSD/money/ticker  is a good source.

So at the moment 1$=0.0082651 BTC
And the opening price is 120.99 BTCUSD