This week has given me pause: I'm getting out of BTC

[notme]

Maybe it is my experience with local, in-person OTC trading, but being locked out of digital fiat doesn't scare me one bit.  In fact, it will likely raise prices if Bitcoin is anything like the other industries where trade was restricted by law.  If the Bitcoins are in my encrypted wallet that is backed up in several locations, no government can touch them.

[notme]

What gives me faith, though, is that the bitcoin market did not budge at all, and in fact went UP after the LR press release.

Here is the question I can't answer right now... if the largest funding source for the most traded currency (USD) on the highest volume exchange is now closed then how is money going to get into and out of the market?  I too am surprised that neither price NOR volume changed very much with this event.  That alone makes me very concerned.  The volume is either fake, inflated by API trading, or something else.

That's where I think you are absolutely wrong.  LR and Dwolla were a tiny portion of the USD funding for MtGox.  Wires have always been how the big money funds their accounts.  Dwolla might have had quite a few individual transactions, but they were only used for smaller transactions.

[bb999]

What gives me faith, though, is that the bitcoin market did not budge at all, and in fact went UP after the LR press release.

Here is the question I can't answer right now... if the largest funding source for the most traded currency (USD) on the highest volume exchange is now closed then how is money going to get into and out of the market?  I too am surprised that neither price NOR volume changed very much with this event.  That alone makes me very concerned.  The volume is either fake, inflated by API trading, or something else.

That's where I think you are absolutely wrong.  LR and Dwolla were a tiny portion of the USD funding for MtGox.  Wires have always been how the big money funds their accounts.  Dwolla might have had quite a few individual transactions, but they were only used for smaller transactions.

Also there are services like Coinbase which makes it relatively simple to use a US bank account to buy Bitcoins. 

[matthewh3]

What gives me faith, though, is that the bitcoin market did not budge at all, and in fact went UP after the LR press release.

Here is the question I can't answer right now... if the largest funding source for the most traded currency (USD) on the highest volume exchange is now closed then how is money going to get into and out of the market?  I too am surprised that neither price NOR volume changed very much with this event.  That alone makes me very concerned.  The volume is either fake, inflated by API trading, or something else.

That's where I think you are absolutely wrong.  LR and Dwolla were a tiny portion of the USD funding for MtGox.  Wires have always been how the big money funds their accounts.  Dwolla might have had quite a few individual transactions, but they were only used for smaller transactions.

I think a large part if not most of bitcoin trades are done off exchanges.  Look at LocalBitcoins and bitcoin-otc.

[worldinacoin]

I am holding enough for transactions but nowadays I don't really accumulate Bitcoin and also stopped mining with my Bitcoin rigs as it is no longer profitable to do so.

[Biomech]

I'm a bit of a newbie. I've been peripherally aware of bitcoin since it launched, but due to personal issues didn't pay much attention.

Stupid of me. I would have made a mint, and it's interesting to boot.

I've spent the last several weeks researching the idea and the implementation of crypto coins. I do NOT think now is a good time to get out, though profit taking is probably a good idea.

The USD is under fire from every imaginable direction, whereas bitcoin, so far, has a few regulatory hurdles to be a viable currency WITHIN the USA, and has jumped a lot of those hurdles or bypassed them altogether outside of the Empire. I'm definitely an Austrian when it comes to economics, and I don't see the dollar surviving it's own cheering squad. When "the Maestro" was in charge of the fed, maybe. Or Volker. But Bernanke? He's a one trick pony, and that trick already failed. He's out of ammunition, both intellectually and actually. Right this moment I see the dollar as a more dangerous investment than the bitcoin.

I think, if your profit taking is good enough, that you would be wise to diversify far beyond the dollar. Physical precious metals, other currencies, ag futures, land if you can find it at market value (I.E. not in the USA), and yes, cryptocurrency. Not just BTC.

Well, that's my take on it anyway. YMMV.

[johnyj]

Some of my projection:

This summer, when ASICminer/Avalon/BFL pushing tons of hash power to the network, if the bitcoin price stay the same, there will be tens of thousands of GPU miners forced to mine at a loss, at that stage it is much wiser for them to purchase bitcoin, (there are no ASIC devices ready for delivery), that will in turn support the bitcoin price, so I think the price will still rise until autumn

But by October, most of the miners will finish their upgrade to ASIC devices, and ASIC devices will become widely available for purchase, there will be less and less buying support for bitcoin, until ASIC devices have been driven to a low profitability level that it barely pays the electricity, that will happen much later next year, so price might fall during that period

In a word, when ASIC devices is still profitable and becomes readily available for delivery, a large amount of capitals will flow to that direction thus reduce the bitcoin buying support

FED is going to end its QEI sometime during this year, that will also impact the available risk capital in the market

[ManBearPig]

I understand your sentiment and if I had 4 or 5 digits of profit rather than 3 I might be tempted to do the same.

I am reasonably confident BTC will not die in the next year.

If it doesn't then the spread of values we can expect range from $10 all the way up the high hundreds.

I certainly would like to be part of the bounce from low double digits and I wouldn't ever want to be out of the market completely on a long-term basis.

I'm a firm believer that the bigger risks are to be taken at the start of any venture not at the end.

It's clear you don't see anything like a similar profit from hereon in so your plan makes sense.

Edit: yes it's the US government departments who will try to kill off BTC but that will be its chance to break free of its relationship with a dying currency. Non-USD exchanges are the future.

[Rampion]

I understand your sentiment and if I had 4 or 5 digits of profit rather than 3 I might be tempted to do the same.

I am reasonably confident BTC will not die in the next year.

If it doesn't then the spread of values we can expect range from $10 all the way up the high hundreds.

I certainly would like to be part of the bounce from low double digits and I wouldn't ever want to be out of the market completely on a long-term basis.

I'm a firm believer that the bigger risks are to be taken at the start of any venture not at the end.

It's clear you don't see anything like a similar profit from hereon in so your plan makes sense.

Edit: yes it's the US government departments who will try to kill off BTC but that will be its chance to break free of its relationship with a dying currency. Non-USD exchanges are the future.

You are underestimating greed.

Do you think 6 digits of profits are cool?

No.

+8 digits of profit are cool. Then you can retire. Otherwise - what's the point?

[frobley]

check again the number of countries bypassing the USD for trade

[ixne]

I still remember the "crash" of 2011 and all the hair-pulling about the death of bitcoin.  I don't have my life savings in or anything like that, but I decided back then just to ride this train out for the fun of it and it's been a lot of fun.  Things were looking a whole lot more dire back in June of 2011, let me tell you.  Back then, something like the blocksize bug/forced hard fork or Mt. Gox freeze might have set Bitcoin back a decade or more.  While I have no idea whether owning bitcoins will make my life easier in the long run and I have no idea what the price will be in a month, I am very confident that the Bitcoin network will be around for many years to come, and I'm interested to be a part of it.

[Spendulus]

I still remember the "crash" of 2011 and all the hair-pulling about the death of bitcoin.  I don't have my life savings in or anything like that, but I decided back then just to ride this train out for the fun of it and it's been a lot of fun.  Things were looking a whole lot more dire back in June of 2011, let me tell you.  Back then, something like the blocksize bug/forced hard fork or Mt. Gox freeze might have set Bitcoin back a decade or more.  While I have no idea whether owning bitcoins will make my life easier in the long run and I have no idea what the price will be in a month, I am very confident that the Bitcoin network will be around for many years to come, and I'm interested to be a part of it.

Those are good comments and hit upon a central point which IMHO is the error of the OP.  It isn't the PRESENCE of adversarial events that imacts the longevity of Bitcoin, but how the bitcoin and it's market responds to those events. 

"Punch back twice as hard."
"In the morning the flag was still standing."

...and so forth.  It is the seeing of a product withstand the events that establishes it as other than a fly by night, or a dot com bubble, etc.

[paraipan]

I might be on the same boat if it wasn't for all the VC money pouring in to Bitcoin startups.  VC's have a good eye for "the next big thing", so I'm going to follow their lead on this.

+1 have to agree on this one.

When in doubt I just imagine bitcoins aren't worth anything. Some random guy on the forum will post his offer for buying a couple of pizzas with 10k of them in short time.

[Rampion]

I might be on the same boat if it wasn't for all the VC money pouring in to Bitcoin startups.  VC's have a good eye for "the next big thing", so I'm going to follow their lead on this.

+1 have to agree on this one.

When in doubt I just imagine bitcoins aren't worth anything. Some random guy on the forum will post his offer for buying a couple of pizzas with 10k of them in short time.

Honestly, I don't need VC's to know that Bitcoin is the next big thing, a revolutionary piece of software that has the potential to change the world as we know it.

[tlr]

Though I met the owner of CampBx, which is based in Atlanta, there is no guarantee that it will remain immune to being shut down.  In which case any BTC I have on their servers may be lost.

So don't leave your bitcoin deposited with CampBx? I don't see the problem here. Do you understand how Bitcoin works? Print some paper wallets and transfer them there.

There are sound reasons (that most of us probably disagree with) to get out of bitcoin but this isn't one of them.

[ThatDGuy]

I'm a bit of a newbie. I've been peripherally aware of bitcoin since it launched, but due to personal issues didn't pay much attention.

Stupid of me. I would have made a mint, and it's interesting to boot.

That's one of the cool aspects of BTC, though: People finding out about BTC today are thinking the same thing.  As are the people that will find out about it tomorrow, and likely even a year from now.

It's one potentially very powerful motivator for future investment.  Seeing that you missed one opportunity is one thing, but seeing that same asset go through two similar-looking hype cycles?  Past results may not dictate future performance, but that isn't how our mind typically perceives it.

[CurbsideProphet]

FED is going to end its QEI sometime during this year, that will also impact the available risk capital in the market

Not a chance.  They might scale it back but they won't pull the rug from under the house of cards.  They're going to keep printing because it's all they know.

[alxs]

FED is going to end its QEI sometime during this year, that will also impact the available risk capital in the market

Not a chance.  They might scale it back but they won't pull the rug from under the house of cards.  They're going to keep printing because it's all they know.

+1

[Biomech]

FED is going to end its QEI sometime during this year, that will also impact the available risk capital in the market

Not a chance.  They might scale it back but they won't pull the rug from under the house of cards.  They're going to keep printing because it's all they know.

I think you're right. In fact, as long as Alan Greenspan's hand picked dick sucker clone mini-me successor is the head of the Fed, it's pretty well guaranteed. But the last time they came to this loggerheads and started pissing their pants they got Paul Volker. It could happen again. The Dollar has (so far) been absolutely the most successful long con in history.

If they're going to keep it running longer, they have to raise interest rates and slow inflation at some relatively near point. Bernanke ain't got the balls to do it, but there are others who might. Obama isn't the sharpest economic tool in the shed, but he is astute at reading the writing on the wall. Never count out the Imperial ability to spin and duck.

Of course, there is one other way to prop up the dollar and still inflate. Another two branches of goverment, one euphemistically called 'defense' and the other called Intelligence, have been setting the stage for world war III for some time. If they choose that option, this time the USA will be Germany. Since it's military presence is already global, that could be real ugly, but it would postpone the destruction of the dollar. It also is EASY to raise the apathy of the American public to bloodlust without thought. Anyone who don't believe me, just look at the evidence from September 12, 2001.

I frankly think that overt attacks on the bitcoin are unlikely at this time. Regulatory horseshit like what they've done to Mt. Gox, yes. They'll make the big exchanges play ball. But that doesn't change a lot, and in some ways makes it easier to subvert and or bypass the dollar economy. I suspect that such attacks will strengthen the bitcoin, and perhaps some of it's variants as well. I'm long on this one.

[CurbsideProphet]

FED is going to end its QEI sometime during this year, that will also impact the available risk capital in the market

Not a chance.  They might scale it back but they won't pull the rug from under the house of cards.  They're going to keep printing because it's all they know.

I think you're right. In fact, as long as Alan Greenspan's hand picked dick sucker clone mini-me successor is the head of the Fed, it's pretty well guaranteed. But the last time they came to this loggerheads and started pissing their pants they got Paul Volker. It could happen again. The Dollar has (so far) been absolutely the most successful long con in history.

If they're going to keep it running longer, they have to raise interest rates and slow inflation at some relatively near point. Bernanke ain't got the balls to do it, but there are others who might. Obama isn't the sharpest economic tool in the shed, but he is astute at reading the writing on the wall. Never count out the Imperial ability to spin and duck.

Of course, there is one other way to prop up the dollar and still inflate. Another two branches of goverment, one euphemistically called 'defense' and the other called Intelligence, have been setting the stage for world war III for some time. If they choose that option, this time the USA will be Germany. Since it's military presence is already global, that could be real ugly, but it would postpone the destruction of the dollar. It also is EASY to raise the apathy of the American public to bloodlust without thought. Anyone who don't believe me, just look at the evidence from September 12, 2001.

I frankly think that overt attacks on the bitcoin are unlikely at this time. Regulatory horseshit like what they've done to Mt. Gox, yes. They'll make the big exchanges play ball. But that doesn't change a lot, and in some ways makes it easier to subvert and or bypass the dollar economy. I suspect that such attacks will strengthen the bitcoin, and perhaps some of it's variants as well. I'm long on this one.

The problem with Bernanke, from day one, is that he's fighting the wrong war.  He's a student of the Great Depression (liquidity crisis) and is very well versed in how to combat this problem, however, this is not the problem we are facing today.  We have a problem of solvency, not liquidity, which is why all this money printing is doing nothing to help the situation.  He mistakenly thinks he's fighting the same war but this is an entirely different animal.  It would be similar to thinking because water put out a house fire, now I should use water on this grease fire.  All fires are not the same and in the case of a grease fire, water actually makes things worse.  Maybe his successor will realize this but I'm not very hopeful.