Why I think bitcoins are a bad investmen at these high prices.

[kkaspar]

EDIT:

Basically, if you get less reward for a given investment, than the investment is more risky??

If that's true, then pretty much every major stock investment in the world has been more risky than investing in bitcoin because all of those other investments have returned less reward.  Bitcoin:  The least risky investment.

I think he was saying that the risk is not just worth it anymore. The risk in buying BTC is about the same as it used to be, but the reward for success is A LOT lower.

[wachtwoord]

If you feel bitcoin is bad in terms of roi, I suggest you look at litecoin.there are also other altcoins with some promise.

Long term Litecoin won't outperform Bitcoin if you buy above 0.03 BTC/LTC. It might even perform worse than that if you buy below that because 0.03 implies LTC has a value of 12% of Bitcoin (4 times higher supply) which I think is an overstatement even if LTC consolidates it's position as second in crypto.

[wachtwoord]

EDIT:

Basically, if you get less reward for a given investment, than the investment is more risky??

If that's true, then pretty much every major stock investment in the world has been more risky than investing in bitcoin because all of those other investments have returned less reward.  Bitcoin:  The least risky investment.

I think he was saying that the risk is not just worth it anymore. The risk in buying BTC is about the same as it used to be, but the prize for success is A LOT lower.

The price of buying Bitcoin has exponentially decreased. This is why the price has exponentially increased. It's not rocket science.

[BittBurger]

I think this should be common sense.  But maybe my logic is wrong somehow, well here goes.

When bitcoins were  $20 dollars each, and you bought $1000 dollars worth of bitcoins, you would own 50 bitcoins.

Bitcoins at $1000 each, you buy $1000 dollars worth, you have 1 bitcoin.

Now for you to double your investment to $2000. Bitcoins at $20 dollars each would have to rise to $40 dollars each.

To double your investment at $1000, 1 bitcoin would have to rise a whopping $1000 dollars more for you to double your investment.

This is why, I think, people are going to stop buying whole Bitcoins, and the price will level out..... until the saturation in the market goes up exponentially, and everyone is buying and selling with the stuff. 

People will want to know how to get some.  Nobody's going to buy a $1500 bitcoin.  Most wont want a 1/100th of a bitcoin.  So when the demand increases enough that larger entities, such as companies (to pay salaries), governments, etc. then i can see the pure *demand* for BTC overall start to push the price up again. 

Unless there is a *massive* marketing effort to transition "Bitcoin" to "sub Bitcoin" (mBTC) ... people are going to stop buying in.  And after numerous discussions with everyone including the Bitcoin Foundation, it doesn't seem anyone gives a flying shit and isn't planning on doing anything.  Coinbase has said outright they have no plans to switch to mBTC.

 Nobody wants 0.00001 bitcoin.  So when people start getting paid in BTC or some other method by which to purchase "whole" amounts (think - winklevoss trust - bitcoin shares) which constitute sub-BTC quantities ... I believe we will level off above the $1000-$2000 mark.  And I could be dead wrong.  But I have yet to hear a single person explain to me why the outright purchasing of bitcoins will continue past that which most humans can afford.

[Dragonkiller]

I think this should be common sense.  But maybe my logic is wrong somehow, well here goes.

When bitcoins were  $20 dollars each, and you bought $1000 dollars worth of bitcoins, you would own 50 bitcoins.

Bitcoins at $1000 each, you buy $1000 dollars worth, you have 1 bitcoin.

Now for you to double your investment to $2000. Bitcoins at $20 dollars each would have to rise to $40 dollars each.

To double your investment at $1000, 1 bitcoin would have to rise a whopping $1000 dollars more for you to double your investment.

This is why, I think, people are going to stop buying Bitcoins, and the price will level out until the saturation in the market demands the purchasing of bitcoins by larger entities, such as companies (to pay salaries), governments, etc. Unless there is a *massive* marketing effort to transition "Bitcoin" to "sub Bitcoin" ... people are going to stop buying in.  Nobody wants 0.00001 bitcoin.  So when people start getting paid in BTC or some other method by which to purchase "whole" amounts (think - winklevoss trust - bitcoin shares) which constitute sub-BTC quantities ... I believe we will level off above the $1000-$2000 mark.  And I could be dead wrong.  But I have yet to hear a single person explain to me why the outright purchasing of bitcoins will continue past that which most humans can afford.

At these prices more serious investors will come in investing bigger amounts. One large investor investing $1m is the equivalent of a thousand "normal" people investing $1,000.

[BittBurger]

At these prices more serious investors will come in investing bigger amounts. One large investor investing $1m is the equivalent of a thousand "normal" people investing $1,000.

Just heavily edited my post from original. lol

[Miz4r]

EDIT:

Basically, if you get less reward for a given investment, than the investment is more risky??

If that's true, then pretty much every major stock investment in the world has been more risky than investing in bitcoin because all of those other investments have returned less reward.  Bitcoin:  The least risky investment.

I think he was saying that the risk is not just worth it anymore. The risk in buying BTC is about the same as it used to be, but the reward for success is A LOT lower.

The perceived risk of BTC failing is a lot lower today than it was a year ago, and the price reflects that. Doesn't that make perfect sense to you? A year ago hardly anyone except hardcore geeks knew about bitcoin. Now we see a lot more awareness all around, and many entrepreneurs starting up businesses around it. How is this so hard to see and grasp for some people? If bitcoin truly succeeds then $1000 for a single bitcoin will seem like nothing, you will still be able to make 5000-50000% profit on your investment which is something you can't get anywhere else as a regular person.

[kkaspar]

At these prices more serious investors will come in investing bigger amounts. One large investor investing $1m is the equivalent of a thousand "normal" people investing $1,000.

Hard to see why would serious investors invest in buying BTC when they could use their serious investments in creating and promoting their own coin that is more refined. Only grey area capitalist cowboys would invest big sums into bitcoin when the trust in the market is lowering everyday. And these guys use every tirty trick in the book to make sure that they will get their money back.
The "i'll buy low and sell high" game is more for the regular folks who don't have the knowledge to use the crypto scene with bigger perspectives. It's more logical for bigger investors to create their own coin or at least invest in building support services for BTC. "I'll buy BTC low and sell high" is just too simplistic for big investments.

[Dragonkiller]

At these prices more serious investors will come in investing bigger amounts. One large investor investing $1m is the equivalent of a thousand "normal" people investing $1,000.

Hard to see why would serious investors invest in buying BTC when they could use their serious investments in creating and promoting their own coin that is more refined. Only grey area capitalist cowboys would invest big sums into bitcoin when the trust in the market is lowering everyday. And these guys use every tirty trick in the book to make sure that they will get their money back.
The "i'll buy low and sell high" game is more for the regular folks who don't have the knowledge to use the crypto scene with bigger perspectives. It's more logical for bigger investors to create their own coin or at least invest in building support services for BTC. "I'll buy BTC low and sell high" is just too simplistic for big investments.

Risk/reward again. Putting $1m in bitcoin now is a lot safer and easier than using that $1m to make and promote your own coin.

[Dragonkiller]

With regards to the OP, yes it is correct that increases in market cap become more difficult, BUT only when we are close to saturation point. We are nowhere near it.

Look at the growth of facebook - it went from 1 million users to 12 million users in 2 years. The next two years it went from 12 million users to 150 million users. Roughly the same rate of growth.

It then took 3.5 years to go from 150 million to a billion. That's because at 150 million users, it was much closer to the saturation point (given that only about 2.4 billion people have internet access).

The point I'm trying to make is that bitcoin can go to $10,000 - $100,000 before getting close to the saturation point.

[kkaspar]

At these prices more serious investors will come in investing bigger amounts. One large investor investing $1m is the equivalent of a thousand "normal" people investing $1,000.

Hard to see why would serious investors invest in buying BTC when they could use their serious investments in creating and promoting their own coin that is more refined. Only grey area capitalist cowboys would invest big sums into bitcoin when the trust in the market is lowering everyday. And these guys use every tirty trick in the book to make sure that they will get their money back.
The "i'll buy low and sell high" game is more for the regular folks who don't have the knowledge to use the crypto scene with bigger perspectives. It's more logical for bigger investors to create their own coin or at least invest in building support services for BTC. "I'll buy BTC low and sell high" is just too simplistic for big investments.

Risk/reward again. Putting $1m in bitcoin now is a lot safer and easier than using that $1m to make and promote your own coin.

It would be a lot better to  invest that $1m into a starting a support service for bitcoin. A lot more stability and potential for it then just buying low. With 10$mil +. And it you wouldn't have to create a new coin alone but to get together a team of investors to create something better.
Buying bitcoin is mostly for people who want to get rich without any work nor knowledge. Serious investors are very skeptical on these kinds of ventures. That is why I also said before that I think most trading data that is shown in the BTC market is simulated or plain false.

[JimboToronto]

it is a much riskier investment now at $700 than it was at $10 or even $100. The marketcap has to increase so much more to get the same gains as you would at a lower bitcoin price.

Investing $1000 when bitcoins is a $1.00, will give you the same downside risk as investing in bitcoins when they are $1000. You both can lose your entire $1000. However, the potential gains are astronomically higher at $1.00 than they are at $1000. For bitcoins to go from say $1.00 to $20 dollars is so much higher than from bitcoins to go from $1000 to $20,000 dollars.

It seems like perhaps you're still thinking in a straight line.

Until the s-curve of adoption goes vertical, it's probably wiser to think logarithmically.

[piramida]

Buying bitcoin is mostly for people who want to get rich without any work nor knowledge. Serious investors are very skeptical on these kinds of ventures. That is why I also said before that I think most trading data that is shown in the BTC market is simulated or plain false.

You would be surprised by how many people "want to get rich without any work"; it's like 99% of the population.

[HappyBitCoinUser]

Buy High, Sell Low, is what some people did.

Who bought coins at $1000+

LOL!

Lost about 1/2 its value.

Just wait for them to go back to $0.01 - $5.00 again.

Soon when all governments and banks disallow any exchange websites, and you can't get your paper money out of it, then value will be $0.00 and you lose 100% of your money.

[Boxman90]

Something just does not add up to me with how the prices are and how high they have grown over such a short period of time.

I have been having doubts that the market is dirtier then it seemed first. Some points that I have been having doubts over:

1) 50%+ of bitcoins are actually held by a group of people who are communicating co-operating with eachother to get the most out of the market. I started having doubts when I saw that during certain times the bots seemed to work together in the same tune. All the bull and beartraps will go through without any solid opposition for some time periods. There are certain periods when the market actually looks like there is a rich vs poor competition, when actually the rich should stay in competition with eachother aswell.

2) The boom in China was simulated for the most part. The demand actually wasn't as big as the numbers show. This could have been done by rich players who bought and sold at the same time to simulate trade and demand to drive the price up. This could have been also done by simply giving out wrong market data.

Most of the community leaders and the dev team has no interest whatsoever to develop rules and regulations to protect the integrity of the market. But with this direction the market will get uglier and uglier every day and eventually it will cross a line when BTC will be called an overall scam. I think that Okcoin simulating the market data is just a tip of the iceberg and more scandals will come out regarding the dirty tricks that are used with the market. I have the biggest doubts about MtGox, since it is not just logical that they are so incompetent with the income they have with fees. It seems more likely that their incompetence is deliberate and a tool to manipulate the market for their own investment directions.

I'm just going to +1 this post.

Again, this doesn't mean we can't make profits, but right now it's delusional to say these are natural movements. It's making Bitcoin look like a joke.

[dropt]

Jesus, Edward50, are you bipolar?  All I ever see are f-ed up retarded rant threads like this coming from you.  Time to darken that ignore.

[humanitee]

Jesus, Edward50, are you bipolar?  All I ever see are f-ed up retarded rant threads like this coming from you.  Time to darken that ignore.

I'm in, Bitcoin is going up!

I'm out, Bitcoin is fucking stupid!

I'm in, I think it's got a chance this time!

I'm out, Bitcoin sucks and isn't worth the electrons it's fabricated on!

[Biro Bob]

I discovered Bitcoin by accident in February 2013. I needed to pay someone USD10. At the time, you could buy Bitcoins easily using block chain.info in the UK I paid GBP25 via bank transfer (approx USD40) and bought 1.7BTC within a few minutes. As you know, the banks have now made this infinitely more difficult and bank transfers take days. Even then, I loved how easy they were to use... and also the fact that (at that time) they kept rising in value and it seemed to be a never ending supply of USD... I kept spending it... but there was always at least $50 in BTC.

Now lets compare it to traditional banking...

I do business in several different countries and several different currencies. In order to transfer GBP to a GBP account in a different country... my bank charges me GBP17.00 (approx USD30) .The transfer is usually instant as its within HSBC. - I then need to ask them via a contact form to convert the funds into local currency (takes a further 24 hours as their business hours are different to mine) - Once converted, I pay various recipients and they charge me around $5 per transfer (and the recipient pays a further $3 to receive)- These transfers usually take 1 to 2 days to get to the recipients banks and exclude weekends.

There is also a limit to how much I can transfer per day using the online system. Anything over their threshold requires me to "contact them directly"

Transferring this way takes around 4 business days and requires me to perform a number of different steps at different times. I pay considerable bank charges each month and I'm restricted by the differing public holidays, working weeks and business hours of the respective countries.

This morning, I realised I needed to make some payments and would need to spread this over two days as I  would exceed my daily maximum.

However - My bank is only open for one more working day until the end of the year as Thursday was already over in that country.

<quote>
As such, we will be unable to reply to your messages nor process any requests received after banking hours of Monday, 23 December 2013; Friday, 27 December 2013 and Thursday, 30 January 2014, respectively. Normal operations will resume on Thursday, 26 December 2013; Thursday, 02 January 2014 and Monday, 03 February 2014, accordingly. "
</quote>

Bitcoin is vastly superior. No bank. No fees. No Holidays. No Working Hours. No inflation. No physical storage.

As they become easier to convert, and people become more understanding of what they really are, the 21 million coin limit makes them look seriously undervalued right now....

I particularly like this post -> https://bitcointalk.org/index.php?topic=176049.0

[kkaspar]

Rules and regulations don't protect markets, they harm them (and their participants). Rules and regulations typically protect those who craft them.

If you are not trying to make jokes here, then this claim is plain old childish. Rules and regulations are there to protect the market, because markets need integrity and trust for any trading to take place. Rules and regulations need to be made so that traders trust is gained, or else the market will just fail. If rules are made for only to protect the few in control, then the market won't get any traders and it will fail. Without rules and regulations there wouldn't be NASDAQ, because without rules there are no agreements and cooperation, and that is what the society is all about.
It's common for teenagers to think that all rules are bad, because they are rebelling against their parents rules and they don't have the experience in functioning in a larger community where rules are necessary for cooperation and stability.

If you think exchanges are engaging in fraudulent behavior, find some proof and share it with the public, or convince it's users to stop using it until it submits to a third party audit.

That is exactly it. Without any rules and regulations there are no possibilities to find any proof on the fraudulent actions of exchanges. They are private companies and they can keep the necessary information as private as they like. I can only observe the public information that I can see on the order list and order history, and by that I can tell you that the information rises serious doubts.
The bitcoin dev should actually create an department that deals with auditing the exchanges and enforces certain rules that are needed to keep stability. The bitcoin dev actually has power to set those terms, but I see that they have 0 interest in this. I have been trying to get them to take down MtGox as the main recommended exchange market from bitcoin.org, but this also received 0 attention from the dev and from the community. MtGox is accidentally incompetent at best and probably they are deliberately incompetent to manipulate the market on their own investments. But bitcoin.org still sends all the new interested people straight to MtGox as the main recommended exchange market. To me, this means that they are either in on it or they are totally oblivious of the financial trust issue that will be affecting the usability of bitcoin more and more.

The behavior of the market seems normal to me, typical Bitcoin. An over excited run up in price due to an influx of new users followed by a sharp correction. Now we consolidate until the market decides where it wants to go.

If you know anything about the currency market or the stock market, then you should know that this isn't normal by any means. When unbreakable invisible walls will be lifted just before a new and unstoppable rise/fall will start, then this is not normal. This means that the market is controlled from a single source without any opposition. The market should not do illogical behavior like this without any opposition. There should be stronger ties to the real value of bitcoin, what is calculated by the mining network and by available usability, but most rises and falls don't have much to do with anything real that is happening with bitcoin. "Some mysterious rich people that no one know about" are just selling or buying out of the blue and most regular "investors" are just sheep who are waiting for where the graphs will go.
This is not normal behavior! This is a behavior of an heavily manipulated market and and disaster waiting to happen.
I can predict you what will probably happen to bitcoin if it continues to go down this road. The instability of the markets will rise and the "mysterious figures" get more greedy and careless every month. Soon they won't even try to synchronize their actions with fake news that they themselves will publish from cryptocoin newsportals they themselves own. This carelessness will contribute to all the leaks that will come out, that the exchanges are heavily manipulated and the market data is simulated or all out fake. By that time bitcoin will have a general reputation of being a scam. No one cares about anymore the technical beauty of bitcoin but they only see the scandals that have surfaced about how the people have been tricked by the exchanges. Then this is the end. Bitcoin will cost about 0.1$ and will consist of a small cult of "true believers", who keep chanting "Chooo chooo to the moon".
The rest of the world will move on and new cryptocurrencies will begin to surface that also promise market safety and price stability. It will take time before any new decentralized monetary form will spread, since most of the people are still skeptical because of the history with bitcoin.
So, you see. This stupidity and greed that runs the current bitcoin markets will set back the general monetary evolution that bitcoin could have started. When the community is mostly supported by degenerate gamblers who are only into bitcoin because of the adrenaline rush of unpredictable trading, then nothing good can come of this.

btw. I am not one of those who is angry at bitcoin because he lost big. I bought at 203$ and sold at 1020$. But every day, looking at the current downtrend, I am getting more convinced that I shouldn't invest back even if the trend turns upwards. I invested in bitcoin because I truly believe in decentralized monetary future and I truly believe that monetary services should be private and therefor competition will better the quality of the financial world. But this current situation with bitcoin market is just silly. There is no idealism nor vision in the current direction that bitcoin is going with it's markets. It's just full of stupidity and greed, with excited people creating illusions of wealth without work nor knowledge and are  fueling each others illusions with traded cheers. Feels more and more like an religious cult then a technological and financial community...

[Peter R]

MtGox = group of fallible human beings

Government = group of fallible human beings

Regulators = group of fallible human beings