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Author Topic: At the end of the month, everybody sells their coins to pay for their rent & etc  (Read 2387 times)
Nagle
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September 22, 2011, 07:09:31 PM
 #21

I just dont see merchants as investors.  they make their money on the sales, not the speculating.  Personally I would have my website setup to offer people whatever the current "instant sale price is on the exchange" and immediately convert it to the local currency.

Right. The volatility is so high that merchants operating on normal merchant-sized margins can't afford to hold Bitcoins for more than a few hours, if that. Especially since the long term trend is down by $4 a month.
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old_engineer
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September 22, 2011, 08:01:41 PM
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Right. The volatility is so high that merchants operating on normal merchant-sized margins can't afford to hold Bitcoins for more than a few hours, if that. Especially since the long term trend is down by $4 a month.

So you're saying that by November, people will be paying you to take their bitcoins?  I think you're smarter than that, so stop repeating that line.  "Long term" doesn't mean "1-4 months", which is the only timeframe for which there is a approximately linear fit of $4/month down.  It's not true at >4 months: it's actually a flat line for 5 months, and the best linear fit for >6 months is positive slope, not a loss.

Linear drop doesn't even work in the short term of the past 2 weeks, either.  Prices have been flat-line in the $4.5 to $6.5 range for two weeks now, and have not dropped $2 more to $2.50 since Sept. 10th.

So... though a linear fit might work for an arbitrary length of time , it's obviously not going to be linear long-term.  My vote is for inverse exponential based on the inflation rate until there's some serious additional new interest in Bitcoin.  The graph appears to be flattening out at $5-$6.  Hmm... perhaps this might also work to bring us from $31 down to $6-ish in 4 months?
http://www.wolframalpha.com/input/?i=graph+31%2Fx^%281.03%29%2C+x+from+1+to+10

Not perfect, but I'll bet you $1000 it models bitcoin value more closely than your function come November. Smiley
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