rpietila Wall Observer - the Quality TA Thread ;)

[Parazyd]

rpietila, what do you think will now happen when Wall Street started trading Bitcoin. Do you think it's good or bad?

Good initially. Bad over the long run. Good initially because they'll pump the price getting in. After that, they have a million tricks to play.

They certainly have a million tricks - manipulating news, huge liquidity to move the price, etc. But, there is the rest of the world involved
here, and no derivatives, naked short selling, etc. which they no longer have at there disposal - I get the feeling once BTC gets going, there bag of
tricks will be much smaller.

But, ass long as they have "the" or "a" reserve currency at their disposal, they can certainly make things extremely
ugly. Buying and selling huge amounts to make BTC very volatile (like we have not yet seen) is a worry. They might be able to effectively neuter it.
Could you imagine them buying the complete order book up, then dumping everything? When you can print money, why not? When you can hide
behind countries, people, etc. why not?
But I think rather than that they will try to utilize it...

IAS

That's exactly what I'm afraid of. They could crush Bitcoin if they wanted to. Let's just hope Bitcoin goes mainstream before that happens.

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[Erdogan]

rpietila, what do you think will now happen when Wall Street started trading Bitcoin. Do you think it's good or bad?

Good initially. Bad over the long run. Good initially because they'll pump the price getting in. After that, they have a million tricks to play.

They certainly have a million tricks - manipulating news, huge liquidity to move the price, etc. But, there is the rest of the world involved
here, and no derivatives, naked short selling, etc. which they no longer have at there disposal - I get the feeling once BTC gets going, there bag of
tricks will be much smaller.

But, ass long as they have "the" or "a" reserve currency at their disposal, they can certainly make things extremely
ugly. Buying and selling huge amounts to make BTC very volatile (like we have not yet seen) is a worry. They might be able to effectively neuter it.
Could you imagine them buying the complete order book up, then dumping everything? When you can print money, why not? When you can hide
behind countries, people, etc. why not?
But I think rather than that they will try to utilize it...

IAS

Re tricks: Would you pay dollars for a contract to be able to sometime in the future, not to receive a certain weight of gold, but to receive dollars for that weight at the current gold price? That is essentially the paper gold market. Maybe you would, because you can not buy a bank quality gold bar, divide it in parts, keep them for a while, sell one part to someone in India, another part to someone in China, without incurring cost for storage, protection, transport, regeneration and assaying. You also get, with paper, near perfect liquidity.

But would you do the same with bitcoin? Probably not.

The paper gold adds volume to the physical gold, and thus depresses the price of gold. I'm quite convinced that paper bitcoin (in the gold paper sense, not paper wallets!) will be offered, but will not play an important role.

[Its About Sharing]

rpietila, what do you think will now happen when Wall Street started trading Bitcoin. Do you think it's good or bad?

Good initially. Bad over the long run. Good initially because they'll pump the price getting in. After that, they have a million tricks to play.

They certainly have a million tricks - manipulating news, huge liquidity to move the price, etc. But, there is the rest of the world involved
here, and no derivatives, naked short selling, etc. which they no longer have at there disposal - I get the feeling once BTC gets going, there bag of
tricks will be much smaller.

But, ass long as they have "the" or "a" reserve currency at their disposal, they can certainly make things extremely
ugly. Buying and selling huge amounts to make BTC very volatile (like we have not yet seen) is a worry. They might be able to effectively neuter it.
Could you imagine them buying the complete order book up, then dumping everything? When you can print money, why not? When you can hide
behind countries, people, etc. why not?
But I think rather than that they will try to utilize it...

IAS

Re tricks: Would you pay dollars for a contract to be able to sometime in the future, not to receive a certain weight of gold, but to receive dollars for that weight at the current gold price? That is essentially the paper gold market. Maybe you would, because you can not buy a bank quality gold bar, divide it in parts, keep them for a while, sell one part to someone in India, another part to someone in China, without incurring cost for storage, protection, transport, regeneration and assaying. You also get, with paper, near perfect liquidity.

But would you do the same with bitcoin? Probably not.

The paper gold adds volume to the physical gold, and thus depresses the price of gold. I'm quite convinced that paper bitcoin (in the gold paper sense, not paper wallets!) will be offered, but will not play an important role.

We are talking about something Disruptive in BTC. We all know how powerful, manipulative and dangerous, etc. the derivatives market is. My hope is that the disruptive force spawns more disruptions, which I think is a given. Little Black Swans are among us... (And the event horizon is short, hard to see imo.) I don't think it can be easily steered, at least past a point in time. Sometimes those in control, only think they are in control, and when they realize they are not, well, then they are not. We seem to be approaching that space in time.

I don't see bitcoin as the solution. It is still money and if it exists in 50 years or further into the future, I think we will have failed as a species. But, it is a destabilizing step in the right direction. It gets us questioning what money is and such. That is more important than BTC imo. Taking away the power of others to create our realities. I am very open to a money that just acts as an exchange, and can in no way give you power over others. Perhaps that is just understanding, but in the interim it might be time based or involve other "stepping stones".

To answer your question, I will not get involved in contracts and that form of speculation. Not being evasive, I'm just saying it doesn't much matter to me. The quicker that profiting/manipulative system is gone, the better. I'm glad in a way that we at least have a chance for some change. I am, or rather was, extremely familiar with the manipulated precious metals markets, but still have something resembling hope, but not exactly that. Maybe trust?

As Terrence McKenna said, We are a part of Nature, we come from it. Just as an apple tree apples, the Earth peoples. 
And to think that we can actually guide it, is a bit illusory (or something like that).


Its about sharing

[Trolololo]

Ghash.io 51% mining control could only be useful for double spending. That's all.
So don't sell your BTCs because of this FUD.

No, that's not all.  They could take 100% of the mining rewards by only building on their own blocks, knocking everyone else out of the mining business so that they then control 100% of the mining.  They could also halt the network and destroy it completely.   

And you're going to say "but they can't steal coins".  So what?  They can make everyone's coins value drop to zero, which is about the same as stealing them from any coin holder's standpoint.

So then you might say "but why would they destroy the network?  They'll lose money too."  We don't even know who "they" are.  Maybe that was their intent all along, or maybe a government agency is going to compensate them.  Given what's at stake you can't just ignore this risk.

They would need much bigger mining percentage to be able to do what you say.

[rpietila]

I don't really understand why you are short-term worried of the share of one pool. I heard that in 24 hours, it had shrunk from 51% to 34%, which means that the community was able to redirect 1/3 of the hashing previously sent to Ghash to other pools. IN 24 HOURS! In decentralized way! Wow.

It remains somewhat of a concern that a malicious entity can own 76% of the hashing power, but a pool where people voluntarily send 51% is not a realistic threat to the Bitcoin ecosystem. Calm down. The problem was solved already, proving that it was not much of a problem.

[bitcoin_bagholder]

I don't really understand why you are short-term worried of the share of one pool. I heard that in 24 hours, it had shrunk from 51% to 34%, which means that the community was able to redirect 1/3 of the hashing previously sent to Ghash to other pools. IN 24 HOURS! In decentralized way! Wow.

It remains somewhat of a concern that a malicious entity can own 76% of the hashing power, but a pool where people voluntarily send 51% is not a realistic threat to the Bitcoin ecosystem. Calm down. The problem was solved already, proving that it was not much of a problem.

I'll bite.

Who would be the malicious entity wielding 76% hashing power? Government buyout of two or three large mining pools? What is 76% representative of?

[sidhujag]

Experienced trader here: Buy with risk $400.

Closer to risk better reward.

If the terms were not an issue (ie. I had full trust on the seller that coins go to the highest bidder, and only $200k deposit per lot was needed) I might bid for two lots at $500 and $4xx for a short-medium term arbitrage play. Lower than that is probably dreaming - and if it should happen, they get sold in the exchanges anyway where it's possible to pick them up.

mtgox volume wasn't replaced... so I don't think we are at the correct settling price... I think $400 is a potential bottom but may not stop on the way down... I changed my mind and unless I see substantial gain in volume per day I think price is vastly overpriced...but this is a great thing for bit coin and its ability to attract a wider audience.

You are wrong in believing that the volume is a fundamental input for price rise. Even if you subscribe to the Keynesian quantity of money theory, which is wrong, but includes money velocity, you are wrong, because purely financial transactions are not included in the velocity. The price rise you see with volume (sometimes, not during dumps!) is from the people who were on the sidelines, then changed their minds and went in.

I really dont understand why you cant get it. Volume on exchange = demand, Block rate = supply.

Maybe you need to trade for longer.

[Erdogan]

Experienced trader here: Buy with risk $400.

Closer to risk better reward.

If the terms were not an issue (ie. I had full trust on the seller that coins go to the highest bidder, and only $200k deposit per lot was needed) I might bid for two lots at $500 and $4xx for a short-medium term arbitrage play. Lower than that is probably dreaming - and if it should happen, they get sold in the exchanges anyway where it's possible to pick them up.

mtgox volume wasn't replaced... so I don't think we are at the correct settling price... I think $400 is a potential bottom but may not stop on the way down... I changed my mind and unless I see substantial gain in volume per day I think price is vastly overpriced...but this is a great thing for bit coin and its ability to attract a wider audience.

You are wrong in believing that the volume is a fundamental input for price rise. Even if you subscribe to the Keynesian quantity of money theory, which is wrong, but includes money velocity, you are wrong, because purely financial transactions are not included in the velocity. The price rise you see with volume (sometimes, not during dumps!) is from the people who were on the sidelines, then changed their minds and went in.

I really dont understand why you cant get it. Volume on exchange = demand, Block rate = supply.

Maybe you need to trade for longer.

My gawd. How can volume on exchange equal demand? Have you not heard about sellers?

[sidhujag]

Experienced trader here: Buy with risk $400.

Closer to risk better reward.

If the terms were not an issue (ie. I had full trust on the seller that coins go to the highest bidder, and only $200k deposit per lot was needed) I might bid for two lots at $500 and $4xx for a short-medium term arbitrage play. Lower than that is probably dreaming - and if it should happen, they get sold in the exchanges anyway where it's possible to pick them up.

mtgox volume wasn't replaced... so I don't think we are at the correct settling price... I think $400 is a potential bottom but may not stop on the way down... I changed my mind and unless I see substantial gain in volume per day I think price is vastly overpriced...but this is a great thing for bit coin and its ability to attract a wider audience.

You are wrong in believing that the volume is a fundamental input for price rise. Even if you subscribe to the Keynesian quantity of money theory, which is wrong, but includes money velocity, you are wrong, because purely financial transactions are not included in the velocity. The price rise you see with volume (sometimes, not during dumps!) is from the people who were on the sidelines, then changed their minds and went in.

I really dont understand why you cant get it. Volume on exchange = demand, Block rate = supply.

Maybe you need to trade for longer.

My gawd. How can volume on exchange equal demand? Have you not heard about sellers?

Btc usd volume is key. I dont use total volume as indication the trick is to find buying volume.. I have my own way to calculatethat on the safe side.. seems to work for most coins.

[Parazyd]

I don't really understand why you are short-term worried of the share of one pool. I heard that in 24 hours, it had shrunk from 51% to 34%, which means that the community was able to redirect 1/3 of the hashing previously sent to Ghash to other pools. IN 24 HOURS! In decentralized way! Wow.

It remains somewhat of a concern that a malicious entity can own 76% of the hashing power, but a pool where people voluntarily send 51% is not a realistic threat to the Bitcoin ecosystem. Calm down. The problem was solved already, proving that it was not much of a problem.

It's not like that... When certain people hear they can harm Bitcoin this way, then we have to start worrying. It's not that simple. CEX.IO, actually, BitFury moved their ASICs from GHash to Discus Fish for a temporary solution. But that doesn't resolve the double-spending vulnerability which IS a SERIOUS threat to the Bitcoin infrastructure and the general Bitcoin idea.

Mining pools were never intended to exist when Bitcoin was first introduced. I don't know if you know a lot about the tech side of Bitcoin so I don't want to bore you to death further. But decentralization is key and no pool should ever have more than 30% of the network hashing power to keep it decentralized.

[wachtwoord]

I don't really understand why you are short-term worried of the share of one pool. I heard that in 24 hours, it had shrunk from 51% to 34%, which means that the community was able to redirect 1/3 of the hashing previously sent to Ghash to other pools. IN 24 HOURS! In decentralized way! Wow.

It remains somewhat of a concern that a malicious entity can own 76% of the hashing power, but a pool where people voluntarily send 51% is not a realistic threat to the Bitcoin ecosystem. Calm down. The problem was solved already, proving that it was not much of a problem.

People have panicked about this happening twice in the past already. You'd think they'd learn ....

Then again, every time the Chinese "ban" Bitcoin everyone cries likes it's the end. Never mind ...

[aminorex]

I personally would expect SR coins to sell for a premium since they are the only coins certified by the u.s. government as being legally unencumbered.

If that is what actually happens, I think it will shock the market, and may precipitate a summer moon-shot.

If it does not, I would not bet on another moon-shot until the next market-scale liquidity event:  Adoption has been subpar (par being the exponential trend) for the past few months.

[Parazyd]

I personally would expect SR coins to sell for a premium since they are the only coins certified by the u.s. government as being legally unencumbered.

If that is what actually happens, I think it will shock the market, and may precipitate a summer moon-shot.

If it does not, I would not bet on another moon-shot until the next market-scale liquidity event:  Adoption has been subpar (par being the exponential trend) for the past few months.

Slow and steady... The drop is due to the auction - a way to try to get them cheaper. Not sure if they'll actually go for cheaper though. After all, it is an auction.

[madmat]

I personally would expect SR coins to sell for a premium since they are the only coins certified by the u.s. government as being legally unencumbered.

If that is what actually happens, I think it will shock the market, and may precipitate a summer moon-shot.

If it does not, I would not bet on another moon-shot until the next market-scale liquidity event:  Adoption has been subpar (par being the exponential trend) for the past few months.

Slow and steady... The drop is due to the auction - a way to try to get them cheaper. Not sure if they'll actually go for cheaper though. After all, it is an auction.

An auction with only one bid per participant. And private auction, no way to know final price.

[Miz4r]

I don't think the coins will sell for a big premium, I think they'll go for around $600 per coin. In the most optimistic case I could see someone bidding exactly $2M for each 3k batch, which would be $666.66 per coin.

[RAJSALLIN]

I don't think the coins will sell for a big premium, I think they'll go for around $600 per coin. In the most optimistic case I could see someone bidding exactly $2M for each 3k batch, which would be $666.66 per coin.

You also have to consider that this is a chance for investors to acquire large amounts which usually will move the market upwards. In so a small premium isn't that hard to imagine.

[rpietila]

The going rate before the announcement was 650 so anything below is already a discount.

[ArticMine]

The going rate before the announcement was 650 so anything below is already a discount.

... and by the same token anything over 650 is a premium. My take is that anyone trading this auction as a bear is taking a major risk and could very likely end up at a loss. There is a large amount of emotion in the Bitcoin community regarding the state and in particular the US government. After all there are strong libertarian and crypto-anarchist roots here. This however is a time for rational thought. The reality is that this auction will be seen by many as a tacit endorsement of Bitcoin by the US Government, and that is very bullish. Furthermore there is a steady stream of good news that are for the most part being ignored by the market. The technical picture is indicative of a turn around and last but not least there are the long term exponential trend-lines which regardless of the data set used are very bullish.

By the way I got my last funds out of MT Gox by buying BTC at a big discount during the silk road seizure by the US Government crash last fall so I have direct experience with profiting from a panic resulting from the fear of the US government.

[SlipperySlope]

Here is the 3-day resolution Bitstamp chart, in which I have drawn the resistance line at $835. This would be a target for the current rally at which point it may hesitate before moving higher . . .

[BTCfan1]

if the sale of the SR coins doesn't affect the market, the news from the sale raising public awareness and legitimizing bitcoin would be enough to push the price over $1k/btc imo

we may move up to and hover around 800-850 but any dramatic rise will happen on the 6/27 or afterwards