Sentiment in 2011

[Maged]

I recently decided to go through some of the posts from the 2011 bubble, so here is some of what I found. Feel free to read the threads to get a better understanding of what people were thinking.

June 11, 2011
"Heads up! Market Bottom? You can buy now for under $22/BTC..."
"...this is a high reward / somewhat low risk time to buy"
https://bitcointalk.org/index.php?topic=14914.0
I needn't tell you what happened next, but this was where we dropped below $13 and stabilized around $20, dropping to around $17 by the time MtGox got hacked.

July 18, 2011
"There are no rallies. There are no crashes.  There is just a slow, steady slide."
"I dont think its gonna go down to 7"
https://bitcointalk.org/index.php?topic=29900.0
It stayed stable at $14, but...

August 03, 2011
"I think we could nick $6 short-term, but looking at $8 in the mid-term"
"I can't help but feel we haven't seen the bottom yet"
https://bitcointalk.org/index.php?topic=34053.0
Both statements were right-on.

August 15, 2011
"...a reversed Head & Shoulders bottom formation has developed"
"...a target price of around 13,5 USD/BTC can be expected"
https://bitcointalk.org/index.php?topic=37296.0
After bouncing between $11 and $12 dollars the next few days, we dropped to around $8.

September 07, 2011
"We have seen the bottom. $6.12 will be the starting point for a long road upward."
"We will never see $6.12 again."
https://bitcointalk.org/index.php?topic=42094.0
A few days latter, the price dropped to just over $4 and stabilized between $5-$6 for about a month before dropping further.

September 09, 2011
"It is following the trend perfectly, now is the time to get in"
"If it drops below $4 today ... will you shut up?"
https://bitcointalk.org/index.php?topic=42495.0
"Bitcoin is over. If you're not out, get out."
https://bitcointalk.org/index.php?topic=42514.0
Stabilized between $5-$6 for about a month before dropping further.

October 22, 2011
"buy, buy, buy!!11111"
"The $3 wall: the gift that keeps on giving."
"We're not going to make it beyond $3.  Go ahead, watch."
https://bitcointalk.org/index.php?topic=49389.0
We broke above $3 and later dropped back to $2. But, if you bought at this time, you were golden.

Anyway, I hope you guys enjoyed this. I encourage more of you to go back and check the old threads out!

[smoothie]

maged thanks for this,

I somehow think there is much difference from now and back then.

Price can go down I suppose, but the world economy awareness is just picking up.

shortly after bitcoin's 2011 crash the media really stopped reporting on it.

This time we dropped 80% or so and media is still covering it.

I honestly think this is the beginning of media attention phase.

The public hasn't woken up to it yet.

Just my take.

[noedaRDH]

Bitcoins are hotter than ever. I don't think what happened in 2011 can really apply to what's going on now.

[Frozenlock]

Bitcoins are hotter than ever. I don't think what happened in 2011 can really apply to what's going on now.

This time it's different. 

[BTC Books]

That whole 6/11 thing was an endless, godawful grind.

Compared to that, our current situation is a walk in the park.  So it goes down to $50 and stays there for awhile?  So what.  We know better now - it would be a buying opportunity, nothing more.  That's not going to happen, anyway.  We go to a hundred and I'll hock one of my kidneys to buy...

Everything is faster now - crashes and recoveries both.  We're heading up - maybe it'll take awhile.  But 'awhile' is measured differently these days.

[Maged]

I honestly think this is the beginning of media attention phase.

The public hasn't woken up to it yet.

Just my take.

I don't disagree, if you look at the larger picture. If you're planning to be invested in bitcoin for 5-10 years, now is a pretty good time to buy. Hell, anything under $10,000/BTC is a good time to buy, at that scale. An argument could even be made for $100,000/BTC.

But that's not the scale I'm talking about here. I'm talking about the daily to weekly scale. In that scale, we've clearly peaked in media attention. If you don't believe me, just look at Google trends! Does the fact that you could have made that same argument in 2011 invalidate the fact that a bubble occurred on the daily and weekly scale?

If you're strictly investing long-term, you should really ignore this board in your forum preferences, because all that matters there are the fundamentals. As long as you watch that, you shouldn't even look at the price, since that will only spark your emotions and cause you to deviate from your plan.

[arepo]

it sure looks different this time...

i'm not quite sure it was 'just a bubble' anyway -- there might have a been a 'bubble top' but the market was aching for a regular old correction. and it feels like deflation is kicking in now -- BTC price can't go down without some serious selling if demand is growing. i even doubt we'll see below $100 anytime soon -- too many people think thats a cheap coin

--arepo

[Maged]

it sure looks different this time...

i'm not quite sure it was 'just a bubble' anyway -- there might have a been a 'bubble top' but the market was aching for a regular old correction. and it feels like deflation is kicking in now -- BTC price can't go down without some serious selling if demand is growing. i even doubt we'll see below $100 anytime soon -- too many people think thats a cheap coin

--arepo

I keep thinking the same thing, but then I remember that people constantly said your last sentence almost exactly, but about $10 instead of $100 back in 2011. So, I don't know what to think.

[UltimateReaper]

It's crazy how far this has come, and will probably be crazy on how far it will go.

[oakpacific]

I think there is a fundamental difference: at 2011 there were way too many with weak hands holding way too much, for which they got at a way too cheap price, at this moment they are mostly out.

And we should not forget, a billion dollars market is quite a bit more difficult to manipulate than a million-dollars market, anyone remember the pandemonium that was Nov 2011(Bitcoinica, etc)?

[arepo]

it sure looks different this time...

i'm not quite sure it was 'just a bubble' anyway -- there might have a been a 'bubble top' but the market was aching for a regular old correction. and it feels like deflation is kicking in now -- BTC price can't go down without some serious selling if demand is growing. i even doubt we'll see below $100 anytime soon -- too many people think thats a cheap coin

--arepo

I keep thinking the same thing, but then I remember that people constantly said your last sentence almost exactly, but about $10 instead of $100 back in 2011. So, I don't know what to think.

the price was only above $20 for about two weeks. that was a serious speculative bubble. this was a serious speculative bubble stacked on top of a serious uptrend. the two events don't seem comparable.

[N12]

Tend to agree with Maged. Unless we get lots of fresh money quickly and can decimate the Bitcoins from the order book causing a positive feedback loop, we are in for a bleeding.

An important factor during times of historical bitcoin scarcity in the markets (BTC on MtGox's book at the peak has been decimated to an unbelievable 30k, and it is still low with barely 130k): Miners still have unbelievable profit margins, and most probably most choose and chose not to sell most of their profits and speculate instead. As the profit margins go down due to difficulty increase and price decrease, they are forced to sell their Bitcoins to cover their running costs, providing the market with a larger share of the 3600 daily Bitcoins. They will also begin to sell their accumulated coins to take profits if sentiment worsens. Now speculators not only have to compete with other speculators, but miners, and a negative feedback loop can emerge. People find themselves having vastly underestimated both the available and the newly added supply.

The time to buy Bitcoins could be when difficulty begins to deflate again. Admittedly, that could happen much further up if another media hype starts, but the chances in my eyes are relatively small.

Further factors making me more bearish in the mid term: Bitcoin exchanges are being eliminated and MtGox is returning to its monopoly status from years ago. Bitcoin still extremely centralized through mining pools (2 people conspiring can do a 51% attack, and actually have done so during the coin fork), block size limit hindering growth (see SatoshiDice), altcoin popularity rising (LTC soon to be added to MtGox; Ripple emerging as possible alternative). Oh, and of course that there are no popular actually used (ie, by lots of people with lots of volume) economic applications I know of besides SatoshiDice and Silk Road. There is still no Bitcoin economy.

PS: Talking on a scale of weeks/months here, of course. Short term I guess I am mildly bullish.

[smoothie]

Yes this time we have held above $100 for much longer than we did $20 in 2011.

[smoothie]

Part of what sparked the last bubble in 2011 was the mining race to arms war.

Right now we haven't even bit off a tip of the ice-berg of how much ASIC hardware can and will come online thus reducing daily mining rewards for miners thus making bitcoins much more difficult to obtain through mining.

[oakpacific]

http://blockchain.info/charts/bitcoin-days-destroyed-min-year?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address=

What does this graph tell you? Time factor is about twice/thrice as large, yet the days destroyed metric has never been above the 2011 peak.

I guess unlike in 2011, most of the coins are not in the hands of early miners, the majority of whom had long cashed out, other than real core elites/seasoned loyal believers, there is not an abundant supply of bitcoins on the market.

[N12]

http://blockchain.info/charts/bitcoin-days-destroyed-min-year?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address=

What does this graph tell you? Time factor is about twice/thrice as large, yet the days destroyed metric has never been above the 2011 peak.

Unlike in 2011, most of the coins are not in the hands of early miners, the majority of whom had long cashed out, other than real core elites/seasoned loyal believers, there is not an abundant supply of bitcoins on the market.

You have failed to read my post. I was talking about how a larger share of newly generated coins is provided to the market as profit margins go down and its effect on the behaviour of dormant supply.

Also, Bitcoin Days Destroyed is a usless metric that is easily manipulated.

[oakpacific]

http://blockchain.info/charts/bitcoin-days-destroyed-min-year?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address=

What does this graph tell you? Time factor is about twice/thrice as large, yet the days destroyed metric has never been above the 2011 peak.

Unlike in 2011, most of the coins are not in the hands of early miners, the majority of whom had long cashed out, other than real core elites/seasoned loyal believers, there is not an abundant supply of bitcoins on the market.

You have failed to read my post. I was talking about how a larger share of newly generated coins is provided to the market as profit margins go down and its effect on the behaviour of dormant supply.

Also, Bitcoin Days Destroyed is a usless metric that is easily manipulated.

I wasn't replying to you.

But I am curious to know how do you manipulate this metric?

[RationalSpeculator]

Tend to agree with Maged. Unless we get lots of fresh money quickly and can decimate the Bitcoins from the order book causing a positive feedback loop, we are in for a bleeding.

An important factor during times of historical bitcoin scarcity in the markets (BTC on MtGox's book at the peak has been decimated to an unbelievable 30k, and it is still low with barely 130k): Miners still have unbelievable profit margins, and most probably most choose and chose not to sell most of their profits and speculate instead. As the profit margins go down due to difficulty increase and price decrease, they are forced to sell their Bitcoins to cover their running costs, providing the market with a larger share of the 3600 daily Bitcoins. They will also begin to sell their accumulated coins to take profits if sentiment worsens. Now speculators not only have to compete with other speculators, but miners, and a negative feedback loop can emerge. People find themselves having vastly underestimated both the available and the newly added supply.

The time to buy Bitcoins could be when difficulty begins to deflate again. Admittedly, that could happen much further up if another media hype starts, but the chances in my eyes are relatively small.

Further factors making me more bearish in the mid term: Bitcoin exchanges are being eliminated and MtGox is returning to its monopoly status from years ago. Bitcoin still extremely centralized through mining pools (2 people conspiring can do a 51% attack, and actually have done so during the coin fork), block size limit hindering growth (see SatoshiDice), altcoin popularity rising (LTC soon to be added to MtGox; Ripple emerging as possible alternative). Oh, and of course that there are no popular actually used (ie, by lots of people with lots of volume) economic applications I know of besides SatoshiDice and Silk Road. There is still no Bitcoin economy.

PS: Talking on a scale of weeks/months here, of course. Short term I guess I am mildly bullish.

great post

all the bulls in denial here make me want to push that sell button

[smoothie]

Tend to agree with Maged. Unless we get lots of fresh money quickly and can decimate the Bitcoins from the order book causing a positive feedback loop, we are in for a bleeding.

An important factor during times of historical bitcoin scarcity in the markets (BTC on MtGox's book at the peak has been decimated to an unbelievable 30k, and it is still low with barely 130k): Miners still have unbelievable profit margins, and most probably most choose and chose not to sell most of their profits and speculate instead. As the profit margins go down due to difficulty increase and price decrease, they are forced to sell their Bitcoins to cover their running costs, providing the market with a larger share of the 3600 daily Bitcoins. They will also begin to sell their accumulated coins to take profits if sentiment worsens. Now speculators not only have to compete with other speculators, but miners, and a negative feedback loop can emerge. People find themselves having vastly underestimated both the available and the newly added supply.

The time to buy Bitcoins could be when difficulty begins to deflate again. Admittedly, that could happen much further up if another media hype starts, but the chances in my eyes are relatively small.

Further factors making me more bearish in the mid term: Bitcoin exchanges are being eliminated and MtGox is returning to its monopoly status from years ago. Bitcoin still extremely centralized through mining pools (2 people conspiring can do a 51% attack, and actually have done so during the coin fork), block size limit hindering growth (see SatoshiDice), altcoin popularity rising (LTC soon to be added to MtGox; Ripple emerging as possible alternative). Oh, and of course that there are no popular actually used (ie, by lots of people with lots of volume) economic applications I know of besides SatoshiDice and Silk Road. There is still no Bitcoin economy.

PS: Talking on a scale of weeks/months here, of course. Short term I guess I am mildly bullish.

great post

all the bulls in denial here make me want to push that sell button

Ok sell all your coins take your monopoly money and go back to your 9-5 job okay? lol 

[arepo]

Oh, and of course that there are no popular actually used (ie, by lots of people with lots of volume) economic applications I know of besides SatoshiDice and Silk Road. There is still no Bitcoin economy.

this is not true... bitcoin is finding its niches in many small places, just planting seeds -- no flowers yet, but soon

i can also tell you from first hand experience that seals with clubs (bitcoin poker) saw a massive influx of new users over the course of the last 6 months.

i think you're underestimating the amount of media coverage we received... bitcoin was all over reddit, tumblr, etc, in a big way. these kinds of things have a gradual effect.

in other words, i think the bitcoin userbase is expanding at an unprecendented rate, even still, though said figure may have taken a hit after the crash.