why price so low

[btczyc]

lately,the bitcoin price has been go down ,why? what happen important event

[1713914571]

1713914571

[1713914571]

1713914571

[1905]

some twist dropped a bunch of btc on the market driving it down. good time to buy is what they tell me. also difficulty dropped again yaaay!

[kokjo]

supply and demand!

high supply and low demand -> price down.

nothing important happen event -> goes demand down...

[silverchair]

No worry, this wont take long 

[pekv2]

also difficulty dropped again yaaay!

Nice!

Slush's difficulty atm, 1777774

[casinobitco]

http://online.wsj.com/video/bitcoin-to-burn-a-hole-in-your-pocket/1FADAD1B-15D6-4250-AD7B-E62556C5D1A3.html

[ineededausername]

The price is low because the bitcoin convention did not attract much media attention, but everyone thought it would and everyone drove the price up to 11.5.

[322i0n]

Is the price really low? maybe the price is too high and has been too high for a while.

[ElectricMucus]

http://online.wsj.com/video/bitcoin-to-burn-a-hole-in-your-pocket/1FADAD1B-15D6-4250-AD7B-E62556C5D1A3.html

now that's ridiculous, immediately after this clip there is an advertisement "on how to manage student loans".  

But he was right about one thing: BTC wouldn't want attention from "those"people.

[skubeedooo]

Every day there are around 5,000 bitcoins mined.  Assuming the miners have a fairly small margin and they have to sell bitcoins to pay their electricity bills*, that means that a similar number will have to be sold daily.  For a $10 price to be maintained, that means the bitcoin economy requires $50,000 worth of outside investment every day, or $1.5M per month.  If you think this rate of new investment is unsustainable, then you would expect prices to fall.

It looks like the largest source of outside investment (other than peoples electricity bills - see below) comes through MtGOX.  So if you want to know whether the price is going to go up or down, just ask Mark Karpeles, or his (real-world) bank how many deposits they get.  You'll see a lot of people say things like "yeah I hope the price falls to $x because then I'll buy", but are they really talking about spending > $10,000 per day on bitcoins?  Because this is the kind of throughput you need to make any kind of noticeable difference on market levels.

FWIW, I reckon BTCs fall to well below $5 and will stay there until either

• someone with real money comes along (hedgefund billionaire?) or
• bitcoins start getting used by more than 1% of online retailers or
• the rate of bitcoin mining decreases significantly (2014?)

* if they are pure miners then they would sell their bitcoins to pay electricity. if on the other hand they pay electricity in USD and keep their BTC, then they are some kind of miner/investor hybrid.  But this doesn't really change the analysis above - it still means that the bitcoin economy need $1.5M of outside investment every month (either through bank transfers or electricity bills) to maintain a rate of $10/BTC.

[joeyjoe]

the price looks to be increasing again, now is the best time to buy i would say

[AssemblY]

the price looks to be increasing again, now is the best time to buy i would say

I agree.

Now about low prices, is simple, more people selling than people buying.

[MollyR]

I think it probably has something to do with our spokesman being revealed as a fraudster? Just my 2c

[shad0wbitz]

lately,the bitcoin price has been go down ,why? what happen important event

Because somebody is pumping and dumping. Or rather, just mainly dumping when the price reaches a certain threshold driven by legitimate buyers. If you analyze the volume it is really interesting. When bitcoin reached 11~12 recently, it got there with relatively low volume (ligitimate users buying the commodity). Then the dumper strikes and the volume spikes like crazy. The dumper stops just before causing a crisis, then patiently waits until the market self heals again and repeats the process.

I attribute this to people with a lot of bitcoins cashing out in an ordered manner to get the most for their money. People by the way, that clearly do not care about the bitcoin economy, but purely about their own greed.

[ElectricMucus]

Well the volume has almost vanished completely now.

[skilo]

IT around 9 USD right now. it was 15USD not to long ago so its probably a good time to buy.

[skubeedooo]

lately,the bitcoin price has been go down ,why? what happen important event

Because somebody is pumping and dumping. Or rather, just mainly dumping when the price reaches a certain threshold driven by legitimate buyers. If you analyze the volume it is really interesting. When bitcoin reached 11~12 recently, it got there with relatively low volume (ligitimate users buying the commodity). Then the dumper strikes and the volume spikes like crazy. The dumper stops just before causing a crisis, then patiently waits until the market self heals again and repeats the process.

I attribute this to people with a lot of bitcoins cashing out in an ordered manner to get the most for their money. People by the way, that clearly do not care about the bitcoin economy, but purely about their own greed.

Why do you class buying as legitimate but selling as somehow malevolent?  Could the sellers not just be miners trying to pay their electricity bills?  I mean in the context of 5k bitcoins being mined every day, the 5k dumps you see on MtGOX every fortnight or so are really not large at all..it's just one day's worth of mining.  Or 3% of one month's mining.

In any case, if these people had cashed out in April when we were at the same levels as we are now, bitcoin would never have reached $30, we wouldn't have had the big crash, bitcoin would have been far less volatile and everyone would have been happy.  So would that have been evil in your PoV?  As in all markets, cashing out at the right time reduces overall volatility - calling it 'greed' is just childish.

[jbspider]

I do think current miners are selling to cover costs.  I think it may be a while before new "non-miners" start to see BTC as something to start buying again.

[ElectricMucus]

Nobody is selling over cost here.
At first currently the price is irrelevant there is no volume at all right now.
Second, these are most likely old coins and these doesn't even have to be sold by miners. Those could just be speculators who bought earlier this year and decided to get out. Might even be the most likely scenario.

[skubeedooo]

Nobody is selling over cost here.

How do you know?  Is there evidence?  Or is it just implausible that people who spend tens of thousands of dollars on mining rigs need to recoup at least some of their money to pay the bills?  Lets be generous and say the cost of mining is half the value of the coins...that means collectively bitcoin miners are spending $25k per day on electricity...that's $10M per year...that's a freaking lot of money to spend on electricity...why are you so sure that everyone doing this is so rich that dropping a few hundred thousand dollars in the short run is no big deal?

At first currently the price is irrelevant there is no volume at all right now.

I can't quite parse that sentence, but the price has been below $12 for over a month now.  According to bitcoin charts, MtGOX has traded 1.2M BTC in that time.  That's quite a lot of volume to say that prices are below $12.

Second, these are most likely old coins and these doesn't even have to be sold by miners.

Why is this 'most likely'.  Do you have any evidence to support it?  It could be, I don't know...I'm just wondering why everyone seems so sure it's the explanation.  Anyway, it doesn't actually follow that old coins don't have to be sold by miners.  If you mined old coins and new coins and you need to pay some USD bills, why would you necessarily trade in your old coins rather than your new coins?

[ElectricMucus]

Most likely refers to speculation on my part and my evidence is common sense.
Use it some times  

[critmass]

IMHO bitcoin prices right now are too high.  When I first heard about this, I was expecting BTC to be trading for less than dollars, or at the very most, around dollars, but $8 per bitcoin?  I think that bitcoin is a great idea, but I think its far from being a full fledged currency.  Most of the sites that I seen are selling a tightly limited number of common products, nothing that makes me want to jump ship of my dollars just yet.
As far as people jacking up prices, look at it from their prospective.  They are taking a much larger risk, accepting BTC than USD.  They deserve to be compensated for that risk, which you probably don't mind if you mined them, and you're happy that you don't have to waste your time going through one of the exchanges to get the cash to buy on a regular site, plus its kind of exciting to buy stuff with BTC.

[joulesbeef]

critmass, tell me where you can can play poker online with us dollars or a us credit card. YAY land of the free!



just recently someone moved 2 million btc or about 20 million dollars, can you do that with dollar bills? without informing the government?


Perhaps there is some value to BTC beyond the scope of your life.

Just saying you cant look at the limited things you want to look at and say 'well it doesnt work for me, so it must be worthless", you have to expand your thinking and say "well what could it do for other people besides myself and why would it be better than dollars"

[Surawit]

Price is HIGH at the moment because of speculators and other people with no interest in Bitcoin as a currency. They just want to make a quick buck then disappear... Hopefully they will all disappear soon, and we can get down to business of moving Bitcoin into the mainstream as a competitor to the US dollar.

[didgydont]

I think now is just the time to buy

[critmass]

critmass, tell me where you can can play poker online with us dollars or a us credit card. YAY land of the free!



just recently someone moved 2 million btc or about 20 million dollars, can you do that with dollar bills? without informing the government?


Perhaps there is some value to BTC beyond the scope of your life.

Just saying you cant look at the limited things you want to look at and say 'well it doesnt work for me, so it must be worthless", you have to expand your thinking and say "well what could it do for other people besides myself and why would it be better than dollars"

You are making the wild assumption that I am against bitcoin.  I am not against it at all.  I actually like the idea a ton, and I am looking forward to becoming an active member of the bitcoin community.  That said, I realize that the current price of bitcoins can not be supported with the size of the bitcoin economy.  A 10% discount on alpaca socks isn't going to drive many people into the market, especially when they have to deal with their own local currencies for most day to day transactions.  And retailers only have the incentive of attracting a special breed of geek and the major disincentive of a very unstable, unsafe, risky currency that can't buy most of the things that they need for a successful business.

My point, obviously not clearly stated, was this; the surge in the price of bitcoin is mostly artificial and is starting to slide down again because the economy that supports it is not nearly large enough.  Now if some wholesalers got on board with bitcoin, then bitcoin would start to warrant something like $8USD/BTC.

[doktor99]

In the context of determining whether 'old' coins are flooding the market (to drive the price down), it's worth tracking the CoinDD (days destroyed) metric available here: http://abe.john-edwin-tobey.org/chain/Bitcoin.

The metric has not grown in any large jump since before this most recent price decline, and as such I suggest this decline is not a result of coins that have been sitting anywhere for any length of time.

[indio007]

Don't worry BTC is still over TWICE  as profitable than every other mainstream investment.

1gh/sec
 $8 per BTC
1000KW
 .15 KW/hr
 30 days

Coins per 24h at these conditions: 0.5658 BTC

Power cost per 24h: 3.60 USD
Revenue per day: 4.53 USD
      ... less power costs: 0.93 USD

Power cost per time frame: 109.57 USD
Revenue per time frame: 133.86 USD
      ... less power costs: 24.29 USD


Net profit first time frame: 24.29 USD

Profit Margin = 18%



Let's compare to other endevours....


Historical US corporate profit margin is 5.5% to 7.5%.
Historical US Equities yield is 9% to 11%


CURRENT

[1905]

hahaha indio! for sure. but the thing is u know this. and others dont. convince them to invest in bitcoin instead of mining. gaining you more profit. bitcoin isnt going anywhere dont get concerned about the longevity of it and therefore give others the opportunity to profit making your difficulty level higher. just a though. if people were smart enough to figure it out for themselves, they deserve the reward.

[1905]

silver has had terrible appreciation since 2001 i hear. dont invest in it either. not even worth looking into. lol

[JimTaylor]

Does anyone foresee it going down anymore next week?  I wanted to invest a bit but I may as well wait if the correction isn't through yet.

[Revalin]

Yes.  My personal opinion is that the fundamentals are still really poor - there aren't very many merchants accepting BTC, so the purchase cycle (Buy BTC on the market, go shopping, pay BTC, merchant sells BTC on the market) can be fulfilled with very few coins - you only need enough to sit in the buyers' wallets until they make their purchase, which realistically means a few days.  That's what I consider to be the fundamental price of the BTC, and it's much lower than where we are now, and it will be until more people accept the BTC for payment.

What's holding the price up right now is speculation: basically, people are hoarding it hoping the price will go up.  Short term the only way that will work is if people can push enough hype to get more people to "invest" (IE, keep speculating and hoarding).  That's what you're seeing in this thread, and from anyone who keeps saying "Up up up!".  People who keep saying the sky's the limit without mentioning any downside are usually the ones holding the bag, and they're trying to pump the price back up because they're losing their investment.  Long-term this never works.

If all the speculation ends (and it's starting to look like we're running out of suckers), the price will fall to the level supported by actual use as currency.  That means cents, not dollars, until we have much more real commerce happening in BTC.  That's fine by me because I want to use BTC as a currency, and it doesn't really matter to me what the price is - I just want it to be somewhat stable, and I think that will happen at a much lower price.

Next post: a bag holder with an insightful rebuttal. 

[indio007]

The only thing missing from Bitcoin is a mature marketplace. It's getting there though.

[critmass]

Yes.  My personal opinion is that the fundamentals are still really poor - there aren't very many merchants accepting BTC, so the purchase cycle (Buy BTC on the market, go shopping, pay BTC, merchant sells BTC on the market) can be fulfilled with very few coins - you only need enough to sit in the buyers' wallets until they make their purchase, which realistically means a few days.  That's what I consider to be the fundamental price of the BTC, and it's much lower than where we are now, and it will be until more people accept the BTC for payment.

What's holding the price up right now is speculation: basically, people are hoarding it hoping the price will go up.  Short term the only way that will work is if people can push enough hype to get more people to "invest" (IE, keep speculating and hoarding).  That's what you're seeing in this thread, and from anyone who keeps saying "Up up up!".  People who keep saying the sky's the limit without mentioning any downside are usually the ones holding the bag, and they're trying to pump the price back up because they're losing their investment.  Long-term this never works.

If all the speculation ends (and it's starting to look like we're running out of suckers), the price will fall to the level supported by actual use as currency.  That means cents, not dollars, until we have much more real commerce happening in BTC.  That's fine by me because I want to use BTC as a currency, and it doesn't really matter to me what the price is - I just want it to be somewhat stable, and I think that will happen at a much lower price.

Next post: a bag holder with an insightful rebuttal. 

I couldn't agree more!  I think that the biggest thing is that BTC doesn't penetrate the economic structure deep enough to warrant accepting it at the retail level, unless you are trying to be novel.  And novelty only goes so far.  That's why I said that if a wholesaler or two get into the BTC game we would see a real explosion in BTC utility, because then retailers don't have to take such a risk on inputs.  Also, if a legit lender (ie not a loan shark) started issuing loans in BTC.  Then you would start to get a sizable economy and start warranting a larger exchange rate.

[mykroft]

lately,the bitcoin price has been go down ,why? what happen important event

I think the $8-10 range is probably the true value of bitcoin at the moment.  The only reason it jumped to $11.50 is because of the speculation that the BTC conference was going to somehow drive up the demand for BTC, but it kinda didn't do anything so the price dropped back down again.   

At least it looks like it's creeping up a little bit after a week of being down below the 2 day average:

http://bitcoincharts.com/charts/chart.png?width=1107&m=mtgoxUSD&k=&r=2&i=Hourly&c=1&s=2011-08-26&e=2011-09-02&Prev=&Next=&v=0&cv=0&ps=0&l=0&p=0&t=S&b=&a1=SMA&m1=48&a2=&m2=25&x=1&i1=&i2=&i3=&i4=&SubmitButton=Draw&

[doktor99]

Don't worry BTC is still over TWICE  as profitable than every other mainstream investment.

1gh/sec
 $8 per BTC
1000KW
 .15 KW/hr
 30 days

Coins per 24h at these conditions: 0.5658 BTC

Power cost per 24h: 3.60 USD
Revenue per day: 4.53 USD
      ... less power costs: 0.93 USD

Power cost per time frame: 109.57 USD
Revenue per time frame: 133.86 USD
      ... less power costs: 24.29 USD


Net profit first time frame: 24.29 USD

Profit Margin = 18%

https://docs.google.com/document/pubimage?id=1s9K93oRTI6AwGqZ1cpAOvW6HyKhqSdggVO0_ignOONw&image_id=1kXwssAy6yqKlftv5wrFUurmYC2hJVg4

Let's compare to other endevours....


Historical US corporate profit margin is 5.5% to 7.5%.
Historical US Equities yield is 9% to 11%

OK, but in order to complete your analysis which compares the gross operating margin of bitcoin mining to other investment instruments, consideration needs to go to 1) the capital cost of the mining rigs and 2) the volatility of the underlying commodity and the associated risk premium. Even if you just take the volatility of the BTC as your cost of capital, the math changes significantly.

[1905]

Don't worry BTC is still over TWICE  as profitable than every other mainstream investment.

1gh/sec
 $8 per BTC
1000KW
 .15 KW/hr
 30 days

Coins per 24h at these conditions: 0.5658 BTC

Power cost per 24h: 3.60 USD
Revenue per day: 4.53 USD
      ... less power costs: 0.93 USD

Power cost per time frame: 109.57 USD
Revenue per time frame: 133.86 USD
      ... less power costs: 24.29 USD


Net profit first time frame: 24.29 USD

Profit Margin = 18%



Let's compare to other endevours....


Historical US corporate profit margin is 5.5% to 7.5%.
Historical US Equities yield is 9% to 11%

OK, but in order to complete your analysis which compares the gross operating margin of bitcoin mining to other investment instruments, consideration needs to go to 1) the capital cost of the mining rigs and 2) the volatility of the underlying commodity and the associated risk premium. Even if you just take the volatility of the BTC as your cost of capital, the math changes significantly.

k well regardless what your math skillz include anything relating to US investments or stock markets are garbage. people want to get on here and talk about how bitcoin is overapreciated and really worth less. wait til the real estate market starts adjusting to what it should be again. fucking flames. there is no guarantees. let people do their math all they want. like the guys who are so smart and say silver and gold are bad investments. yes they might be in a bubble right now... but in the long run they are going to make you the most... second to bitcoins of course.

[cbeast]

*snip*

like the guys who are so smart and say silver and gold are bad investments. yes they might be in a bubble right now... but in the long run they are going to make you the most... second to bitcoins of course.

+1

[perfectfire]

New currency + uncertain future + controversy + low volume = high volatility.

[critmass]

k well regardless what your math skillz include anything relating to US investments or stock markets are garbage. people want to get on here and talk about how bitcoin is overapreciated and really worth less. wait til the real estate market starts adjusting to what it should be again. fucking flames. there is no guarantees. let people do their math all they want. like the guys who are so smart and say silver and gold are bad investments. yes they might be in a bubble right now... but in the long run they are going to make you the most... second to bitcoins of course.

Actually, in the long run, investments in precious metals traditionally don't outperform stocks.  Neither do currency investments.  So it might be better to say that those are better short term investments.

New currency + uncertain future + controversy + low volume = high volatility.

exactly

[Taro Kudo]

I think bitcoin must make more connection with social value. Such as resources,  services, things made by imaginational and original ideas, food, clothes etc.

And transaction fee of bitcoin does'nt set mathematically.  This is a second things must be solved.

Third, bitcoin's Idea doesn't protected with patent. If it protected by patent bitcoin will be only one currency of this kind.

Anyway there are 150000 tons of gold in this world and 1 kg is 30000$.
Assume If bitcoin replaces this gold value, 1btc can be 214000$.

[Revalin]

let people do their math all they want. like the guys who are so smart and say silver and gold are bad investments.

This isn't a gold forum, so I'm gonna keep this short:



I don't have to do any math to see what's going on there.  Holy fucking parabola.  Intrinsic value has been left in the dust, and people are gonna get screwed.

[Revalin]

I think the $8-10 range is probably the true value of bitcoin at the moment.
...
(chart)
...

Sure, for the short-term, it's leveled off at 8.5.  But I'm a long-term player, so here's how I see it:



It's leveled off, but that's a hell of a long slide for you to be saying it's stable at its "true value" now.

[phantomcircuit]

It's been a series of calamities one after another.

[Bitcraft]

Enjoying the new difficulty though.

[mykroft]

Sure, for the short-term, it's leveled off at 8.5.  But I'm a long-term player, so here's how I see it:

It's leveled off, but that's a hell of a long slide for you to be saying it's stable at its "true value" now.

True, longer term it's down.  I was just referring to the post-conference week after we saw that initial jump before the conference.  It's anyone's guess as to what it'll do real long term.

[Gustavofring]

I think it will take a revamp to the wallet system and transfers (alongside stabilization) before more businesses will adopt BTC and further stabilize it. It can take an hour or more before a transaction is 'confirmed' and the receiver has those BTC freed up to use.

[Cato]

The price of Bitcoins will eventually stabilize, but who can say when. Aren't skilled traders benefiting from volatility anyway?

[BitcoinRedLight]

It's been a constant string of mishaps. It could readily be lower.

[Gyom]

Price is still much higher than it was a year ago.

Everything depends on timing... buy when people are afraid, sell when people are greedy!

That's what they say on Wall Street

[iprivately]

The price of Bitcoins will eventually stabilize, but who can say when. Aren't skilled traders benefiting from volatility anyway?

bingo! There's plenty of people making bitcoin money as we speak. don't be fooled

[AssemblY]

We'll mine more and talk less.

Soon they'll have little bitcoins in the market, the cotation will up, and whoever have the most coins will cry less.

 

[Troll Toll]

now that fall is coming and winter after that i'll just use my 4 rigs as space heaters.

if only I lived in svalbard

[Mrbit]

I still don't think we've seen a bottom, I think it will reach 2-3 dollars and then either stabilize or the bottom will fall out and we'll be talking cents.

[cbryant23]

Hopefully this is the equilibrium point for the price for bitcoin but most likely not

[StanMarsh]

I would'nt worry even if it went down to 1 $ or something. I'm sure it will go up like a few months ago, probably even higher!

[idontknow]

now that fall is coming and winter after that

Is that from the latest Rebecca Black song?

[Shawshank]

You have to keep in mind that every day approximately 7200 new Bitcoins are minted. This sustained supply keeps the price restraint. Eventually, in 2013 the supply will go down to 3600 Bitcoins per day, and it will halve again four years later. If the technical implementation is solid, and people trust its stability, the BTC/US$ exchange ratio may well go up.

[film2240]

I think it probably has something to do with our spokesman being revealed as a fraudster? Just my 2c

Can I see a link to this please? As it would be shocking if true.
Thank you

[danman87]

He's talking about Bruce. Not tough to Google.

[t3a]

Do you guys think that this is a bit omenous?

All I have gotten so far is "GREAT TIME TO BUY", but as an uneducated person, I would like to see more than one opinion:

http://bitcoincharts.com/charts/chart.png?width=1016&m=mtgoxUSD&k=&r=&i=&c=0&s=&e=&Prev=&Next=&v=0&cv=0&ps=0&l=0&p=0&t=C&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&SubmitButton=Draw&

[nefanon]

Do you guys think that this is a bit omenous?

All I have gotten so far is "GREAT TIME TO BUY", but as an uneducated person, I would like to see more than one opinion:

http://bitcoincharts.com/charts/chart.png?width=1016&m=mtgoxUSD&k=&r=&i=&c=0&s=&e=&Prev=&Next=&v=0&cv=0&ps=0&l=0&p=0&t=C&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&SubmitButton=Draw&

To be honest it looks like we're back at around the average prices before the $30 spike. But what do I know