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Author Topic: Bitcoin supply shock - why hasn't price exploded? Will it implode?  (Read 577 times)
truthcracker
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June 23, 2011, 12:48:08 PM
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Supply / demand - the main exchange doing 90% of business has frozen a massive chunk of bitcoins for days now.  With the supply shock, why hasn't the price exploded? I mean if bitcoins are hot the few left around should be trading gangbusters.  Could it be there is no underlying demand at this stage but speculation?  So basically what i'm implying is that the people at Mt Gox were selling to each other mostly with a trickle of miners.

Does that tell you something?  If you want this to succeed you need vendors.  I think the cash that's poured in has gone to the first holders of bitcoins and I think I'd be very careful given there's no boom in the underlying demand.

Because if there is no demand we are about to see a supply FLOOD when Gox comes online.  So unless you all start trading with each other, add the miners new coins, where's the new cash coming from?  Vendors are taking it OUT if there are any.

How do you guys see it?  I'm calling it a great idea that's become a casino, partly due to the distribution curve its tracking on.  

[Edit]
PS all comments on crap spelling and grammar are welcome - both have no intrinsic value Wink  Shocked
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I HATE TABLES I HATE TABLES I HA(╯°□°)╯︵ ┻━┻ TABLES I HATE TABLES I HATE TABLES
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evileric
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June 23, 2011, 12:59:44 PM
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Porn and  Gambling will be the two best areas to focus on IMHO.. And creating an easy mechanism for people to purchase coins (dwolla is great if you're in the states, I'm in Canada so my options are rather limited).

The economy needs to grow, spending coins on real goods and services is essential, I'm thinking of offering consulting services for website owners and pricing in BTC at a discount to encourage use - thoughts?
truthcracker
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June 23, 2011, 01:13:47 PM
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Porn and  Gambling will be the two best areas to focus on IMHO.. And creating an easy mechanism for people to purchase coins (dwolla is great if you're in the states, I'm in Canada so my options are rather limited).

The economy needs to grow, spending coins on real goods and services is essential, I'm thinking of offering consulting services for website owners and pricing in BTC at a discount to encourage use - thoughts?

Economically speaking, yes - for sure.  They fit the model.  So does silk road despite what others day.  I think international transfers definitely.  Target young people travelling - beats the hell out of western union if you do a bit of planning first.  Charities - I can see that- but people like the tax dedications so good for lots of small donations.  Might be good for political parties looking to hide the source?

Other things I can see are youtubers with the link under their videos asking for support.  I think its got potential for a lot of people to give a little because of the non-existent transaction fee.
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June 23, 2011, 01:28:25 PM
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Supply / demand - the main exchange doing 90% of business has frozen a massive chunk of bitcoins for days now.  With the supply shock, why hasn't the price exploded? I mean if bitcoins are hot the few left around should be trading gangbusters.

There is no shortage of bitcoins due to the MtGox hack.
There actually is a shortage of dollars in the market because those dollars are frozen in MtGox accounts, so prices should rather be expected to drop.


So basically what i'm implying is that the people at Mt Gox were selling to each other mostly with a trickle of miners.

The people at MtGox were selling to each other. No way denying that  Grin


I think the cash that's poured in has gone to the first holders of bitcoins

Yep.


and I think I'd be very careful given there's no boom in the underlying demand.

Whatever you think fits your interests best.


Because if there is no demand we are about to see a supply FLOOD when Gox comes online.

That's right, a lot of people will want to withdraw from MtGox, thereby flooding other Exchanges with bitcoins.

Withdrawing their dollars will take a little longer.


So unless you all start trading with each other, add the miners new coins, where's the new cash coming from?

There's not a lot of new cash coming in at the moment. Prices drop. With a lower price, more people will think it is a good opportunity to buy. They will pour cash into the market.

Just my .02 btc

Yeah, well... I'm gonna go build my own blockchain, with blackjack and hookers. In fact, forget the blockchain!
truthcracker
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June 23, 2011, 01:42:09 PM
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Supply / demand - the main exchange doing 90% of business has frozen a massive chunk of bitcoins for days now.  With the supply shock, why hasn't the price exploded? I mean if bitcoins are hot the few left around should be trading gangbusters.

There is no shortage of bitcoins due to the MtGox hack.
There actually is a shortage of dollars in the market because those dollars are frozen in MtGox accounts, so prices should rather be expected to drop.


So basically what i'm implying is that the people at Mt Gox were selling to each other mostly with a trickle of miners.

The people at MtGox were selling to each other. No way denying that  Grin


I think the cash that's poured in has gone to the first holders of bitcoins

Yep.


and I think I'd be very careful given there's no boom in the underlying demand.

Whatever you think fits your interests best.


Because if there is no demand we are about to see a supply FLOOD when Gox comes online.

That's right, a lot of people will want to withdraw from MtGox, thereby flooding other Exchanges with bitcoins.

Withdrawing their dollars will take a little longer.


So unless you all start trading with each other, add the miners new coins, where's the new cash coming from?

There's not a lot of new cash coming in at the moment. Prices drop. With a lower price, more people will think it is a good opportunity to buy. They will pour cash into the market.

Just my .02 btc

Thanks for your views.  But there are less bitcoins, they are stuck at the exchange.  And as for money, because they were all generated by mining, and most very cheaply, the coins outweight the cash.  I mean its not like every coin out there was bought for $20.  Its only the fractional traders.  Do you see?
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