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Author Topic: Monthly average USD/bitcoin price & trend  (Read 115580 times)
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Zangelbert Bingledack
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December 09, 2013, 11:54:17 PM
 #281

Not exactly a new paradigm, but if China had never exploded (in its own much faster exponential move) we would still expect the exponential trendline to hold. But China did explode and is now a major player. Unless we expect China to go back to where it was 8 months ago (x4 for slower exponential gain on the main trendline), shouldn't we count China's jump-in as a one-time bump to the trendline? Perhaps 30% up? That would mean we're still less than 2x the trend and could go much higher in this bubble.
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Zangelbert Bingledack
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December 10, 2013, 12:01:34 AM
 #282

If we truly are going to the "more vertical" part of the S-curve,

The accelerating part of the S-curve is only ever exponential growth. It just starts to feel "vertical" to us humans at some point. It doesn't ever go faster than exponential growth (in the ideal curve). The first half is exponential growth and the second half is logarithmic leveling off.
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December 10, 2013, 12:56:13 AM
 #283

If we truly are going to the "more vertical" part of the S-curve,

The accelerating part of the S-curve is only ever exponential growth. It just starts to feel "vertical" to us humans at some point. It doesn't ever go faster than exponential growth (in the ideal curve). The first half is exponential growth and the second half is logarithmic leveling off.

correct, and so far we still seem to be in the first half, and it will likely take a while before we reach the second half.
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December 10, 2013, 06:13:11 AM
 #284

If we truly are going to the "more vertical" part of the S-curve,

The accelerating part of the S-curve is only ever exponential growth. It just starts to feel "vertical" to us humans at some point. It doesn't ever go faster than exponential growth (in the ideal curve). The first half is exponential growth and the second half is logarithmic leveling off.

correct, and so far we still seem to be in the first half, and it will likely take a while before we reach the second half.

I wouldn't be so sure about that.

Almost by definition, it will be fast.
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December 10, 2013, 07:10:35 AM
 #285

Bitcoin may not necessarily have a traditional single S-curve hockey stick, because there are a number of completely different markets it competes for that could achieve critical mass over completely independent timeframes.
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December 10, 2013, 07:58:09 AM
 #286

What program did you use to make that graph? I'm interested in performing some bitcoin and litecoin trend analysis and I'm trying to find more tools to look at the data with. Send me a PM or respond in the thread please.

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December 10, 2013, 08:00:52 AM
 #287

If we truly are going to the "more vertical" part of the S-curve, there's a possibility that the growth is so fast that it goes toward parabolic rather than logarithmic.  So we may be seeing that uptick OR we may be WAY ahead of where we should be still (although $500 seems VERY firm at this point).

Where were we 30 days ago? Oh yes, $290, and just had crossed the ATH and everybody felt so good.

Now, $912 seems "cheap" to them who would like it go to the moon before Christmas.

There is still so much air in the bubble. Hard to know, which outcome I would like most, ch00 ch00 or orderly reversion to the trend.

Is it true that the end stage of mania can go geometrically super-linear, meaning an acceleration of the percentage rate growth in price?

I expect we've moved into bubble blowup phase transition already, because this is psychologically to the internet as the invention of the combustion engine was to gasoline. Before that we were burning whale oil for lamp lighting.

As stated upthread, I think the logistic S curve is inapplicable to a mania. Rather it is applicable to adoption of technology for efficiency reasons, e.g. modern appliances and computers. Bitcoin adoption is driven not for primarily for efficiency although one can make arguments for and against Bitcoin being more efficient, rather for innate survival instincts that resolve around saving for the lean times, i.e. the notion that one's savings could be devalued to nothing by not buying it.

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December 10, 2013, 08:10:14 AM
 #288

If we truly are going to the "more vertical" part of the S-curve, there's a possibility that the growth is so fast that it goes toward parabolic rather than logarithmic.  So we may be seeing that uptick OR we may be WAY ahead of where we should be still (although $500 seems VERY firm at this point).

Where were we 30 days ago? Oh yes, $290, and just had crossed the ATH and everybody felt so good.

Now, $912 seems "cheap" to them who would like it go to the moon before Christmas.

There is still so much air in the bubble. Hard to know, which outcome I would like most, ch00 ch00 or orderly reversion to the trend.

Is it true that the end stage of mania can go geometrically super-linear, meaning an acceleration of the percentage rate growth in price?

I expect we've moved into bubble blowup phase transition already, because this is psychologically to the internet as the invention of the combustion engine was to gasoline. Before that we were burning whale oil for lamp lighting.

As stated upthread, I think the logistic S curve is inapplicable to a mania. Rather it is applicable to adoption of technology for efficiency reasons, e.g. modern appliances and computers. Bitcoin adoption is driven not for primarily for efficiency although one can make arguments for and against Bitcoin being more efficient, rather for innate survival instincts that resolve around saving for the lean times, i.e. the notion that one's savings could be devalued to nothing by not buying it.

S-curve is very applicable to Bitcoin's adoption as a payment technology "use as a currency".

Don't everyone think that the "store-of-value" aspect was a little overextended when the average bitcoin stash per owner was $12,000 a week ago?

(If not, then just scale it to the adult population of the world and we get $54 trillion bitcoin market cap when all are in (9 times that of gold). Sounds like what we've been dreaming, ergo must be true.)  Cool
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December 10, 2013, 09:52:59 AM
 #289

What program did you use to make that graph? I'm interested in performing some bitcoin and litecoin trend analysis and I'm trying to find more tools to look at the data with. Send me a PM or respond in the thread please.

I think the graph in OP is made with Excel. I posted an updated graph created with R including its source code.

https://bitcointalk.org/index.php?topic=322058.msg3821474#msg3821474
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December 10, 2013, 11:35:36 AM
 #290

S-curve is very applicable to Bitcoin's adoption as a payment technology "use as a currency".

That is not why people are buying it. That purpose is not what is driving the emotional need to buy before it is too late.

The nature of currency is precisely that it doesn't matter when you buy it.

Don't everyone think that the "store-of-value" aspect was a little overextended when the average bitcoin stash per owner was $12,000 a week ago?

(If not, then just scale it to the adult population of the world and we get $54 trillion bitcoin market cap when all are in (9 times that of gold). Sounds like what we've been dreaming, ergo must be true.)  Cool

It is either overextended and we come back to some rational adoption S-curve for use as a currency, or I am correct that the driving force is the notion of hyperinflation has begun and there is a mad spiraling race to see who can dump fiat the fastest and get into BTC before it is too late.

We should be able to watch the price and observe which mode we are in estimate the exponential function best approximating the price rise, but this can do nothing to tell us about the shape of the subsequent (looming) waterfall crash except we can estimate when the expected portion of the world's net worth will be in already.

It is impossible for the purchases ("adoption") to be rational w.r.t. to performance of the currency platform aspect. It can tell us nothing about the potential as a currency. We must first go through an exponential speculative rise and crash. The remaining question is what is the exponential curve of the price action. It can't be an S-curve, because of the nature of the price action is the antithesis of currency adoption. The exponential rate of price appreciation dwarfs any one buying it ONLY to use it as a currency. I am extremely confident that you can do any survey you want and it will confirm my assertion.

I don't think all people will succumb to that mania, so I think the limiting headroom is far below the net worth of the world.

If we want to measure the currency adoption, we need to use different metrics other than the price. And even transactions growth is overstated, because people are using a multitude of transactions to make themselves anonymous via coin mixers and trading back and forth between altcoins. Not to mention the speculative trading transactions, the SatoshiDice dust (useless/abuse) transactions, etc.

There may be significant currency adoption but it can't be significant compared the capital pouring in for the price appreciation.

What program did you use to make that graph? I'm interested in performing some bitcoin and litecoin trend analysis and I'm trying to find more tools to look at the data with. Send me a PM or respond in the thread please.

I think the graph in OP is made with Excel. I posted an updated graph created with R including its source code.

https://bitcointalk.org/index.php?topic=322058.msg3821474#msg3821474

Where is the math? What fitting curve are you employing?

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December 10, 2013, 02:01:40 PM
 #291

What program did you use to make that graph? I'm interested in performing some bitcoin and litecoin trend analysis and I'm trying to find more tools to look at the data with. Send me a PM or respond in the thread please.

I think the graph in OP is made with Excel. I posted an updated graph created with R including its source code.

https://bitcointalk.org/index.php?topic=322058.msg3821474#msg3821474

Where is the math? What fitting curve are you employing?

I use a linear model lm() on the transformed prices.

Code:
result <- lm(log10(prices) ~ months)

As stated before, I'm a R n00b so this might be wrong.
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December 10, 2013, 03:30:00 PM
 #292

Risto, do you advice me to follow your SSS plan- buy despite we are over the long trend? I got interested again  in bitcoins when the price was around 220 at bitstamp (news about first Bitcoin ATM published in Estonia). After that i made Bitstamp and tried to get verified. Took me 4 times and finaly the price was around 770. Made my first buy at 82x and now my average is 930. At the moment i have 50 per cent of fiat waiting in bitstamp of what i have already invested in bitcoins. I am not sure if and how much i am able to invest in the future. I just do not want to loose potential ROI as i have done so far.
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December 10, 2013, 03:41:39 PM
 #293

Risto, do you advice me to follow your SSS plan- buy despite we are over the long trend? I got interested again  in bitcoins when the price was around 220 at bitstamp (news about first Bitcoin ATM published in Estonia). After that i made Bitstamp and tried to get verified. Took me 4 times and finaly the price was around 770. Made my first buy at 82x and now my average is 930. At the moment i have 50 per cent of fiat waiting in bitstamp of what i have already invested in bitcoins. I am not sure if and how much i am able to invest in the future. I just do not want to loose potential ROI as i have done so far.

This kind of decisions are best that everybody makes for himself. As for me, I am now double short because the dcb will probably bounce at 926 (BS), 988 (Gox) and it is looking toppish. Also it is over trendline.

According to SSS, you should not care though Smiley
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December 10, 2013, 03:54:34 PM
 #294

One aspect that may be throwing the trend higher is the ASIC revolution. They only started shipping since Spring/Summer. Which led to MUCH higher difficulty, leading to higher price. I would feel comfy buying any three digit cheapies at this point. The next batches are about double the current hashing power. The only thing that concerns me is that mining is quickly becoming a rich-person-only hobby. Wondering if this will ultimately kill bitcoin within a couple of years.

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December 10, 2013, 04:10:00 PM
 #295

One aspect that may be throwing the trend higher is the ASIC revolution. They only started shipping since Spring/Summer. Which led to MUCH higher difficulty, leading to higher price. I would feel comfy buying any three digit cheapies at this point. The next batches are about double the current hashing power. The only thing that concerns me is that mining is quickly becoming a rich-person-only hobby. Wondering if this will ultimately kill bitcoin within a couple of years.

Difficulty does not drive price.

FYI: mining with ASICs is currently wildly profitable in fiat terms, but on the contrary it would have been a better investment to buy directly BTC with the money spent on the miner. This has been a constant historically - buying coins is more profitable than mining 90% of the times.

Real-life example & figures:

A batch #1 550GH/s Jupiter unit costed $7000 + shipping + VAT ($8.500 - $9.500 in total depending on the shipping costs to your location and your local VAT); it has mined between 38 and 49 bitcoins up to date, depending on your spot in the delivery queue.

At the current difficulty that 550GH/s unit is still generating aprox. 0.3 BTC per day (roughly $270 a day), and at a standard rate of $0.15 kw/h the power it draws costs only $2.16/day - wildly profitable in fiat terms as you see.

On the other hand, when those units were paid (3rd and 4th June 2013), $7000+shipping+VAT would have bought between 65 BTC and 73 BTC, depending on the final cost of the miner based on your location and VAT. Its possible that those machines will never mine that amount of coins. Plus, if you had waited till July, you could have bought sub-$100 coins - definitely the most profitable move.


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December 10, 2013, 04:19:22 PM
 #296

Bitcoin may not necessarily have a traditional single S-curve hockey stick, because there are a number of completely different markets it competes for that could achieve critical mass over completely independent timeframes.

Interesting thought. I will have to consider the implications of that. Not sure it would make the graph look much different, might extend the time frame significantly as sequential waves of adoption hit their stride. (Just first thought)

____________


On the whole, I expect adoption growth to follow and support the price. No surprise there. The speculation actually encourages adoption growth, and creates a virtuous cycle - as we have seen. We may get ahead of this, and occasionally behind as we go - we humans/markets are crazy emotional - and speculation is most often ahead of the "true value" adoption curve as the price/value-finding mechanism works its magic. But the value of the bitcoin network ultimately depends on adoption and ubiquity. Those are the numbers I am watching. And until those numbers start in the other direction, or slow down significantly, I am very confident in price growth. The more real people and businesses accessing and trusting the btc network, the higher the ultimate price. Of course restating the obvious for most of us here.

And now for something more sobering - just for fun...

Thought you all might enjoy this post that showed up in my inbox this morning. This chart was circulating back in April too. It was sent to caution folks about the bubble in equities, but is certainly a cautionary tale for those of us who think/know we are smarter than the average bear (Yogi, and market). I don't believe this is bitcoin's future,  but it reminds and reinforces why a Risto-type SSS plan or comparable is essential - no matter how bullish and smart we think we are.


"An early example is the case of Sir Isaac Newton and the South Sea Company, which was established in the early 18th Century and granted a monopoly on trade in the South Seas in exchange for assuming England's war debt.

Investors warmed to the appeal of this monopoly and the company's shares began their rise.

Britain's most celebrated scientist was not immune to the monetary charms of the South Sea Company, and in early 1720 he profited handsomely from his stake. Having cashed in his chips, he then watched with some perturbation as stock in the company continued to rise.

In the words of Lord Overstone, no warning on earth can save people determined to grow suddenly rich.

Newton went on to repurchase a good deal more South Sea Company shares at more than three times the price of his original stake, and then proceeded to lose £20,000 (which, in 1720, amounted to almost all his life savings).

This prompted him to add, allegedly, that "I can calculate the movement of stars, but not the madness of men."



The chart of the South Sea Company's stock price, and effectively of Newton's emotional journey from greed to satisfaction and then from envy and more greed, ending in despair, is shown above. "

Those of you who know more about this example may argue that this is not like btc at all - granted. But we are still dealing with human beings - even in a new crypto-math age.

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December 10, 2013, 04:29:39 PM
 #297

Just look at the Sea South Bubble chart. That kind of growth is ridiculous compared to Bitcoin. What you have there, a ten-fold increase before going bust to pre-bubble levels?

Compare that to Bitcoin. From $0.05 (or even less if you count the "Sirius trade") to $1242 in 3 phases:

  • 2011: from $0.8 to $32, with a correction down to $1.98
  • early 2013: from $12 to $266, with a correction down to $50
  • late 2013: from $145 to $1242, with a correction down to.... Huh

Read carefully those numbers and compare them with any other bubble you can remember... I've never known a bubble that behaved as Bitcoin is behaving. The bottoms are way higher than the "start of the bubble"... Which just mean they were not bubbles.

Regarding some interesting quotes:

Having cashed in his chips, he then watched with some perturbation as stock in the company continued to rise.

A rational plan like the one outlined in the OP protects you from that emotional and dumb behavior. You need to have targets, and stick with them. In Bitcoin, one of that targets has to be to keep a portion of your stash for the very long run - but you can gradually cash out a % or "rake" of your coins giving "zero fucks" about what the price does next. You need to enjoy the profits at some point, otherwise you are deluding yourself and you will get overemotional, which will lead to mistakes.

Having cashed in his chips, he then watched with some perturbation as stock in the company continued to rise.

In the words of Lord Overstone, no warning on earth can save people determined to grow suddenly rich.

Newton went on to repurchase a good deal more South Sea Company shares at more than three times the price of his original stake, and then proceeded to lose £20,000 (which, in 1720, amounted to almost all his life savings).

This is ironic and gives you some perspective on Bitcoin's revolutionary nature. "Newton purchased more stocks at more than three times the price of his original stake"? Well, most of my coins were bought in the $12-$20 range - but I've bought quite a lot also on the $67-$100 range during this summer. Paraphrasing the South Sea Bubble text, "Rampion purchased more BTC at five to ten times the price of his original stake"....

And I know I'm not alone in here.

Were those cheap coins? You can bet they were.

Was it a mistake? You can bet it wasn't.

For good or bad, Bitcoin will be in history books.

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December 10, 2013, 04:30:41 PM
 #298

@Rampion, yes I totally agree that buying coins is more profitable than mining, the vast majority of the time.

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December 10, 2013, 04:32:35 PM
 #299

So I guess the "crash" has just moved us back to more "normal" growth at this point? 

I guess the good thing is that each rise shows us that we are on our way to those new highs.  It should give us some confidence of where Bitcoin is going anyways.

The problem is that the "crash" so far has not come even close the trendline. So either it was not a crash at all, or we will be visiting the trendline soon (down), or there is a new paradigm in bitcoin price (such as the one of growth spurts without deep crashes in 7/2010-6/2011).

It quacks like a crash. So my bets are hedged whether to visit the trend or continue higher in a sense that invalidates the trend.

I'm personally leaning toward the "revert to the trend" scenario, but suspect that it will get there mostly through time - rather than much greater price drops. Of course we could be seeing an acceleration of the trend with all the breakthrough acceptance BTC has achieved in the last month. If so I will be sad to let go of the current trend chart (even in exchange for a more aggressive line), as it has been very comforting to have next to my desk. But BTC keeps blowing my mind - and that is the name of the game - so I guess no reason to stop now.

You just need a new and improved chart next to your desk showing growth to $1,000,000 next year.  Grin  Hey, it is probably more accurate then the $1300 potential value for BTC that Bank of America somehow came up with last week!

Yes, I am open to a new chart. But one that shows $1,000,000 next year will not make me comfortable.  Wink
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December 10, 2013, 04:56:15 PM
 #300

OP updated to the best chart (by tonico).

I did some very interesting analysis re:the similarities of relative overvaluation in April and now. In April we were "only" about 3.2x the then current trendline when the bubble popped.

Now the high value has been similarly 3.3x (at ATH).

If the bubbles compare, expect $400s to be visited not only briefly but repeatedly.
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