why has bitcoin been crashing?

[mgio]

Up to a max of about $166 today a noon EDT and now down to $145 just 3 hours later.

Is it market manipulation?

Volatility cause by lack of liquidity? One big order drove the price way up and now it's dropping back to where it was yesterday?

Or did people just panic when they saw how fast it was rising and remember the bubble from 2 weeks ago?

What do you think is going on?

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[Grantmo]

Not to simplify things, but very basic FEAR and GREED. Both drive the price, in either direction. 

[ManBearPig]

A crash you say?

I see people taking profits on a crazy spike in value.

We will close above $150 I imagine, a nice gain and another green candlestick.

We also have the knowledge of what kind of move we can expect in the next couple of days.

By the way: this is what a correction from over-sold looks like without a DDoS!

[NamelessOne]

The price shot up incredibly fast over the last 24 hours. This is a healthy correction.  

[mgio]

Makes sense. I agree with everything written here.

It's hard for me because I am a long-term investor here (bought the vast majority of my coins at ~$10 and haven't sold) yet I watch the ticker like a day trader.

[massivebitman]

I don't think it's a crash, just a correction.

[Wuji]

why has bitcoin been crashing?

Because the majority who buy it don't use it as currency.  They are speculating with something virtual and like to believe it is more valuable than gold or paper.  Thus since it is all speculation and the price is way overvalued, the price must come down.   I mean at least the Germans could wallpaper their house when their money became useless.  If the tiny market of goods traded via BTC crashes all you have is unneeded ones and zeros you will erase.  I love bitcoin but it has not been widespread adopted, only goes up on speculation, and will probably be overpriced until some of these wonderful news stories actually become reality.

[RodeoX]

The real question is why does the stock market crash like this? Bitcoin is hyper-liquid and has no barrier to quick sales. It is a small, and has relatively shallow depth and is unregulated. The stock market of the 19th.century was similar and went through comparable boom and bust cycles. I think bitcoin is responding logically to the present market forces.

[Phenomenon]

Once Bitcoin reaches critical mass, the price will become much more stable.  Until then it's a roller coaster.

[Catacombkid]

Is it bad that I suspect a rebound?

[mgio]

why has bitcoin been crashing?

Because the majority who buy it don't use it as currency.  They are speculating with something virtual and like to believe it is more valuable than gold or paper.  Thus since it is all speculation and the price is way overvalued, the price must come down.   I mean at least the Germans could wallpaper their house when their money became useless.  If the tiny market of goods traded via BTC crashes all you have is unneeded ones and zeros you will erase.  I love bitcoin but it has not been widespread adopted, only goes up on speculation, and will probably be overpriced until some of these wonderful news stories actually become reality.

I mean the past 3 hours, not in general.


And the value of bitcoin is not just in it's use as currency. I'm not sure if bitcoin will ever be useful as a currency.

Other than the relatively small black market, there is nothing you can buy with bitcoin that you can't buy with a credit card.

What is the advantage of spending a deflationary currency like bitcoin over an inflationary one like the dollar? The answer is you will always want to spend the dollars over the bitcoins and horde the bitcoins because the bitcoins increase in value while the dollars don't.

The lack of credit card fees is not reason alone that bitcoin is worthwhile.

Bitcoins are more useful as a store of value such as gold presently. That gives it real value right now.

[Wuji]

The real question is why does the stock market crash like this? Bitcoin is hyper-liquid and has no barrier to quick sales. It is a small, and has relatively shallow depth and is unregulated. The stock market of the 19th.century was similar and went through comparable boom and bust cycles. I think bitcoin is responding logically to the present market forces.

Because stocks are valued in Price % Earnings.  P/E ratio.  It is speculation exactly like Bitcoin is.  When the earnings come out lower than expected the Price goes down as speculators realize they were wrong.

[Dr.Steve]

Once Bitcoin reaches critical mass, the price will become much more stable.  Until then it's a roller coaster.

and what defines critical mass?
"When the price becomes more stable"?

[UltimateReaper]

Bitcoin is volatile, pray to the gods of commerce, and luck

[BitcoinAshley]

Because the majority who buy it don't use it as currency.  They are speculating with something virtual and like to believe it is more valuable than gold or paper.  Thus since it is all speculation and the price is way overvalued, the price must come down.   I mean at least the Germans could wallpaper their house when their money became useless. 

...
Wait, what?

That doesn't make ANY sense at all.
1) Your first statement, the foundation of your argument, applies to volume but not to population
Rephrase your statement and it is correct. The majority of PEOPLE who buy it DO use it as currency. The majority of BITCOINS are not used as currency, rather, they are saved (or as the occupy wall st. bears like to say, "hoarded.") Just like with any other currency. There are a FEW rich people who have lots of bitcoins, but most of them DO use coins for standard purchases, they just have so many that they would never need to spend anywhere near all of them. There are a LOT of not-so-rich people who have a few bitcoins, and have an equal basic need for goods and services and use bitcoins for them. They are your thousands upon thousands of nerds who have some saved for appreciation, and some used for various things - webhosting, computer parts, precious metals, online purchases, etc. Like Elwar buying dog food with bitcoins - is he "using it as a currency" because he bought dog food with it, or is he an "evil speculator" because he also has a cold wallet full of coins?
Your statement that most "People" with bitcoins don't use it as currency, only as speculation, is not only wrong, it is unprovable since it lacks a method for validation - what percent of total held coins must be spent on a regular basis in order to be considered a "person who uses bitcoin as a currency?" Does a person who spends 50% of his coins regularly qualify as a "spender" but somone who spends 24% qualify as an evil speculator? At least start by making a claim that can be disproved.

2) When the statement is rephrased to refer to volume rather than population, i.e. the only way it could be correct, it applies equally to fiat money.
The vast majority of PEOPLE with viat money (99.9999%) use it as a currency.
However, the vast majority of the TOTAL VOLUME of fiat money is used for speculation (many quadrillions in the futures market, which is many times more than the remaining quantity of money on the entire earth.)
Fiat money has only novelty value as a wallpaper so that is a moot point. Even if bitcoin was worth 1 cent, I could instantly send it to someone in Bangkok, anonymously and for a very low fee. I can't do that with a piece of paper after it hyperinflates, falls out of favor, and is not accepted anywhere except in my authoritarian country.
(Try passing a Cypriot-marked euro in Germany or an Argentinian peso in any other country, heck, try even leaving the countries with those bills in your wallet without getting arrested. Capital controls are a bitch.)

[wrenchmonkey]

Bitcoin is volitile, it's not "crashing". A jump from $20 to $260, and a fall back to $150 is not a crash. It's a short term jump, and a quick correction.

There are lots of contributing factors to the recent major fluctuations. Some of it has to do with all of the coverage it was receiving when it was climbing (new people jumping on board), some of it has to do with people "liquidating" their liquid assets in banks in order to try to keep from being robbed (Cyprus), they "liquidated" their euros to Bitcoins. Lots of people doing this at once causes prices to spike. Then they took the bicoins and "liquidated" them in a different bank/country. Lots of people selling coins at once causes a drop...

But after the craziness, we're still at $150, as opposed to $20 a few weeks ago. That's a far cry from a "crash".

[adamstgBit]

a hand full of generous bitcoiners are selling to a crowd of newbies...

Thank them!

[TTBit]

The real question is why does the stock market crash like this? Bitcoin is hyper-liquid and has no barrier to quick sales. It is a small, and has relatively shallow depth and is unregulated. The stock market of the 19th.century was similar and went through comparable boom and bust cycles. I think bitcoin is responding logically to the present market forces.

In demand driven markets, such as Stocks, Bonds, Real estate and Bitcoin, the supply is known or easy to forcast. There can be IPOs, bond issues, and high-rises to increase supply, but this is not a large price risk to the market. The price is simply what will someone pay for it. These prices are subject to price collapses, as lower prices can actually reduce demand in human psyche.

In supply driven markets such as orange juice, gasoline, grains. The demand is relatively known, but the supply is a concern. Weather and war impacts the potential supply of these markets. The price risk to these markets is to the upside as a frost and drought can wipe out a large portion of oranges and corn. A hurricane can cause natural gas supply to be halted. War in the middle east shocks supply concerns of crude oil.

[nkspace]

Because the majority who buy it don't use it as currency.  They are speculating with something virtual and like to believe it is more valuable than gold or paper.  Thus since it is all speculation and the price is way overvalued, the price must come down.   I mean at least the Germans could wallpaper their house when their money became useless. 

...
Wait, what?

That doesn't make ANY sense at all.
1) Your first statement, the foundation of your argument, applies to volume but not to population
Rephrase your statement and it is correct. The majority of PEOPLE who buy it DO use it as currency. The majority of BITCOINS are not used as currency, rather, they are saved (or as the occupy wall st. bears like to say, "hoarded.") Just like with any other currency. There are a FEW rich people who have lots of bitcoins, but most of them DO use coins for standard purchases, they just have so many that they would never need to spend anywhere near all of them. There are a LOT of not-so-rich people who have a few bitcoins, and have an equal basic need for goods and services and use bitcoins for them. They are your thousands upon thousands of nerds who have some saved for appreciation, and some used for various things - webhosting, computer parts, precious metals, online purchases, etc. Like Elwar buying dog food with bitcoins - is he "using it as a currency" because he bought dog food with it, or is he an "evil speculator" because he also has a cold wallet full of coins?
Your statement that most "People" with bitcoins don't use it as currency, only as speculation, is not only wrong, it is unprovable since it lacks a method for validation - what percent of total held coins must be spent on a regular basis in order to be considered a "person who uses bitcoin as a currency?" Does a person who spends 50% of his coins regularly qualify as a "spender" but somone who spends 24% qualify as an evil speculator? At least start by making a claim that can be disproved.

2) When the statement is rephrased to refer to volume rather than population, i.e. the only way it could be correct, it applies equally to fiat money.
The vast majority of PEOPLE with viat money (99.9999%) use it as a currency.
However, the vast majority of the TOTAL VOLUME of fiat money is used for speculation (many quadrillions in the futures market, which is many times more than the remaining quantity of money on the entire earth.)
Fiat money has only novelty value as a wallpaper so that is a moot point. Even if bitcoin was worth 1 cent, I could instantly send it to someone in Bangkok, anonymously and for a very low fee. I can't do that with a piece of paper after it hyperinflates, falls out of favor, and is not accepted anywhere except in my authoritarian country.
(Try passing a Cypriot-marked euro in Germany or an Argentinian peso in any other country, heck, try even leaving the countries with those bills in your wallet without getting arrested. Capital controls are a bitch.)

bitcoinashley bitcoin ashley just shut your trap, what are you the bear nazi. get a life

[ronaldlee0917]

If there are always reasons for a price moment, that is not speculation but a science.