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Author Topic: Here we go again, bitcoin exchange rates have been doing just fine  (Read 6802 times)
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September 05, 2011, 10:56:09 AM
 #21

If you want to make bad news look good: A) use a log graph, B) include completely irrelevant data in your graph, such as last year's bitcoin price which 99% of bitcoiners have never experienced and can never experience.  Sure, if I bought bitcoins at $0.05 I would still be saying that bitcoins today are fantastic and the price is brilliant.  But the vast majority of bitcoin users do not.
Haha, yeah. I completely agree, this is the sort of thing governments would do to manipulate the public.

Log chart for 0.05-1$, seriously? Get in touch with reality and have a look at the volume in USD. Then see how many people bought at 20-30 for their first time.

Also, the downtrend from 32 has been longer than any other in history (where it always exceeded the former high in just 2 months), and much sharper. From 32 to 5.74 it’s a 82% regression, and we are currently 76% down. So no, it’s apparently not a historically normal correction.

Your kind has brought up the same thing when Bitcoin declined from 30 to 20, leading many people to hold on to their losing investment. So I say GTFO with your "objective" data of when Bitcoin was something noone has ever heard of.

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September 05, 2011, 02:25:46 PM
 #22

Log scale? Jesus christ. The denial is strong in this thread.

I wish you actually made a logical argument instead of resorting to Jesus christ. It's quite simple, I'll try and explain it better. If you represent the data in linear scale, doubling the price from 1 to 2 is represented by say one inch on y axis, whereas doubling the price from 10 to 20 is represented by ten inches. Both cases are actually identical as far as your fiat investment is concerned (it has doubled), but linear scale misrepresents them as fundamentally different. That is, you would be in denial that someone could have doubled their investment going from 1 to 2 just as someone else got it going from 10 to 20. In logarithmic scale these two identical cases are also visually identical. Linear scale is distorted, log scale is not. This is nothing exclusive to Bitcoin. It is nothing exclusive to exponential trends either. Log scale is appropriate whenever you want to represent relative change without distortion.

A log scale is only useful if the data appears to have exponential growth/decline on a linear scale. Bitcoin does not. HTH.
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September 05, 2011, 06:19:42 PM
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Log scale? Jesus christ. The denial is strong in this thread.

I wish you actually made a logical argument instead of resorting to Jesus christ. It's quite simple, I'll try and explain it better. If you represent the data in linear scale, doubling the price from 1 to 2 is represented by say one inch on y axis, whereas doubling the price from 10 to 20 is represented by ten inches. Both cases are actually identical as far as your fiat investment is concerned (it has doubled), but linear scale misrepresents them as fundamentally different. That is, you would be in denial that someone could have doubled their investment going from 1 to 2 just as someone else got it going from 10 to 20. In logarithmic scale these two identical cases are also visually identical. Linear scale is distorted, log scale is not. This is nothing exclusive to Bitcoin. It is nothing exclusive to exponential trends either. Log scale is appropriate whenever you want to represent relative change without distortion.

A log scale is only useful if the data appears to have exponential growth/decline on a linear scale. Bitcoin does not. HTH.

You got it wrong. When data appears to have exponential growth/decline on a linear scale, log scale will make it look like a straight line. That is all, and that is irrelevant. Who cares if it looks like a straight line or not?  My paragraph above explains clearly why log scale is appropriate. It's really not that hard to grasp.



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September 05, 2011, 06:29:10 PM
 #24

If you want to make bad news look good: A) use a log graph, B) include completely irrelevant data in your graph, such as last year's bitcoin price which 99% of bitcoiners have never experienced and can never experience.  Sure, if I bought bitcoins at $0.05 I would still be saying that bitcoins today are fantastic and the price is brilliant.  But the vast majority of bitcoin users do not.

This is a valid argument, except that I wasn't trying to make things look good or bad.  I simply presented data for the past 12 months in an objective way. I learned about Bitcoin towards the end of 2010, so my perspective may be different than that of the majority, I agree. Furthermore, I haven't invested in Bitcoin anything that I can't afford to lose, and in fact the main reason for me being involved at all has nothing to do with making money. I mine, I trade, but my perspective is a bit broader than that.


Log chart for 0.05-1$, seriously?

Well, yes. How else would you use log chart? If you represent only a narrow range, than linear and log scale will look almost identical anyway. When data spans several orders of magnitude, linear scale is not appropriate, and I explained why.

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September 05, 2011, 06:35:49 PM
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Log chart for 0.05-1$, seriously? Get in touch with reality and have a look at the volume in USD. Then see how many people bought at 20-30 for their first time.


Bingo.  80% of bitcoin involvement, both in hashing power and $ started at around $8/BTC.   An amazing amount of buying happened between $11 and $32, and plenty of people are now looking at a massive absolute dollar loss in their portfolio.

It's nice that we're flatlining on the log scale and that people involved before the start of this year are still realizing mind boggling profits, but reality for nearly all direct buyers of bitcoins is they're looking at a hefty loss in their brokerage account.  And even the early adopters must have done some math on how much they were worth at $32, $20, $15, $13 etc, and are now looking at their free Porsche rapidly becoming a free pizza.  Logs are great and all, but people think about their investments in absolute dollars.  Just saying...

My investment strategy has me selling like clockwork by Tue or Wed of each week.  Missed last week, and ouch so sorry about that.  But still profitable, still mining, still siphoning out a few $ a week...

Also, you are wrong about the $100 investment being a $100 investment no matter what the BTC price.   That is utterly wrong.  You are buying a much larger portion of the total at a lower than at a higher price.  It's like a market cap for a public stock.  A company with 6000 customers might be a fantastic investment with a 1M dollar market cap but a completely stupid investment with a 200M market cap.  Ditto bitcoin.




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September 05, 2011, 07:44:13 PM
 #26

The OP is right with this one. It's entirely irrelevant that a large number of current Bitcoin users bought Bitcoins at a price higher than the one we currently have. That is only an issue if you're doing a mid-term investment. For all other buyers, the long term players and people who actually want to use the currency, it was not an issue at all. The people who did mid-term investments made a big fucking mistake buying as an investment, it's that simple.

The people who are in it for the long term are still doing good even if they bought at double the current price. We've had a downward trend of what, a few months? That is an insignificant time for many of us! If it's significant to you, well then it's your problem. But when we talk about the long term then we show charts that actually show us the long term.

Everyone knows now, and smart people knew then, that the $32 was just a massive bubble. It's not relevant in the long run. Bitcoin has grown massively and is very stable right now with a good long term price. What happens now and in the future is what matters, talking about what happened during the last 2 months specifically is irrelevant.

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September 05, 2011, 07:46:46 PM
 #27

If you want to make bad news look good: A) use a log graph, B) include completely irrelevant data in your graph, such as last year's bitcoin price which 99% of bitcoiners have never experienced and can never experience.  Sure, if I bought bitcoins at $0.05 I would still be saying that bitcoins today are fantastic and the price is brilliant.  But the vast majority of bitcoin users do not.

This is a valid argument, except that I wasn't trying to make things look good or bad.  I simply presented data for the past 12 months in an objective way. I learned about Bitcoin towards the end of 2010, so my perspective may be different than that of the majority, I agree. Furthermore, I haven't invested in Bitcoin anything that I can't afford to lose, and in fact the main reason for me being involved at all has nothing to do with making money. I mine, I trade, but my perspective is a bit broader than that.


Log chart for 0.05-1$, seriously?

Well, yes. How else would you use log chart? If you represent only a narrow range, than linear and log scale will look almost identical anyway. When data spans several orders of magnitude, linear scale is not appropriate, and I explained why.
...except that what you do conceals 10-20% losses over a mid-range period. Logarithmic scales are only useful when prices have changed significantly. The only reason to do what you do - log scale and long timeframe - is to hide the fact that bitcoin are steadily declining.
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September 05, 2011, 08:02:17 PM
 #28

Everyone knows now, and smart people knew then, that the $32 was just a massive bubble. It's not relevant in the long run. Bitcoin has grown massively and is very stable right now with a good long term price. What happens now and in the future is what matters, talking about what happened during the last 2 months specifically is irrelevant.

It's relevant when for 80% of the current bitcoin community bitcoin has only existed for about 4 months.  Even as a long term investment it's possible to increase the ultimate payout by adjusting your position to reflect present reality as you go along.  I'm a long term bitcoin bull, but I've been SELLING over the past few months.   Today, the same money I made selling would buy me 2.5 as many bitcoins as I've sold.  And unless the short and medium term trend reverses soon there's a good chance I'll get 3x, 4x or even 100x as many coins for the same investment.

I don't know about you, but I'm feeling pretty smart about myself right now compared to the buy & holders.


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September 05, 2011, 08:26:26 PM
 #29

7 day moving average - no log scale

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September 05, 2011, 08:48:18 PM
 #30

Thanks to the OP for the log graph, pretty interesting way to look at things!

Most people that bought coins to hold them, imagining they'd make a x100 profit were mistaken about bitcoin's very nature...

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September 05, 2011, 08:52:26 PM
 #31

If you want to make bad news look good: A) use a log graph, B) include completely irrelevant data in your graph, such as last year's bitcoin price which 99% of bitcoiners have never experienced and can never experience.  Sure, if I bought bitcoins at $0.05 I would still be saying that bitcoins today are fantastic and the price is brilliant.  But the vast majority of bitcoin users do not.

This is a valid argument, except that I wasn't trying to make things look good or bad.  I simply presented data for the past 12 months in an objective way. I learned about Bitcoin towards the end of 2010, so my perspective may be different than that of the majority, I agree. Furthermore, I haven't invested in Bitcoin anything that I can't afford to lose, and in fact the main reason for me being involved at all has nothing to do with making money. I mine, I trade, but my perspective is a bit broader than that.


Log chart for 0.05-1$, seriously?

Well, yes. How else would you use log chart? If you represent only a narrow range, than linear and log scale will look almost identical anyway. When data spans several orders of magnitude, linear scale is not appropriate, and I explained why.
Bitcoin is in a major drop. We just have had many extremely major increases before. Saying bitcoin is doing just fine is like saying Irene was just fine because Katrina was much, much, worse. If any stock halves in two monthes, it's crashing a lot. If any stock doubles in a two weeks, it's rallying even more than a lot. But just because the rally dwarfed the crash does not mean it isn't crashing.

This chart is not nessesarily skewed, but it is based on past prices and the large amount of fluctuation. If I extended that chart up to one million and down to 0.000001, I could present the data saying "bitcoin price has barely changed since the start" because after all, it has only thousand-folded and the chart should display a truly long-term forecast for the decades to come.
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September 05, 2011, 08:55:25 PM
 #32

Thanks to the OP for the log graph, pretty interesting way to look at things!

Most people that bought coins to hold them, imagining they'd make a x100 profit were mistaken about bitcoin's very nature...
Or just about the timescales involved

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September 05, 2011, 09:02:52 PM
 #33

Or just about the timescales involved
I beg to disagree, I feel that the less bitcoins circulate the more value they lose.

If it's used like a currency, if it circulates, if people are trading with them then mechanically more people will use them, more people will accept them, they will necessarily gain value and remain stable.

Waiting 20 years won't make them anymore valuable if everyone hoards them...

Somehow I feel it's like a self balancing mechanism Smiley

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September 05, 2011, 09:26:19 PM
 #34

Or just about the timescales involved
I beg to disagree, I feel that the less bitcoins circulate the more value they lose.

If it's used like a currency, if it circulates, if people are trading with them then mechanically more people will use them, more people will accept them, they will necessarily gain value and remain stable.

Waiting 20 years won't make them anymore valuable if everyone hoards them...

Somehow I feel it's like a self balancing mechanism Smiley
If everyone hoards them, they will increase in value. It's sort of like the bubble effect though - since there really won't be much holding it up, it might crash big time.
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September 05, 2011, 09:36:17 PM
 #35

If any stock halves in two monthes, it's crashing a lot. If any stock doubles in a two weeks, it's rallying even more than a lot. But just because the rally dwarfed the crash does not mean it isn't crashing.

Alright, I think I understand this point of view. I simply provided an objective, unskewed picture of the past 12 months. Of course this picture (fragments of it, that is) will have different subjective meaning for different people, depending on their situation. That is all. From my perspective, Bitcoin is doing just fine for now.

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September 05, 2011, 09:49:37 PM
 #36

It's relevant when for 80% of the current bitcoin community bitcoin has only existed for about 4 months.  Even as a long term investment it's possible to increase the ultimate payout by adjusting your position to reflect present reality as you go along.  I'm a long term bitcoin bull, but I've been SELLING over the past few months.   Today, the same money I made selling would buy me 2.5 as many bitcoins as I've sold.  And unless the short and medium term trend reverses soon there's a good chance I'll get 3x, 4x or even 100x as many coins for the same investment.

I don't know about you, but I'm feeling pretty smart about myself right now compared to the buy & holders.
I get what you mean, I've done the same. I've sold pretty much all my coins because the trend was so clearly down. But I only had the balls to do this because I've actually read analysis, thought about it a lot on my own and just wanted to try trading.

Not everyone wants to do that because it's risky when you don't know what you're doing, some people just buy and hold for a long time. Obviously if you know what you're doing you'll make much more profit than those who just hold but then again it requires effort and time so that you don't miss the boat going down or up so it's not "free profit". And it's more risky than just holding in some ways, however holding can be very risky if Bitcoin never goes up again.

As a long term bull or Bitcoin enthusiast I obviously think it's very unlikely that it's not going up again so trading is overall more risky than just holding, you need to know what you're doing. I think I know something now but I have a lot to learn as a trader.

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September 05, 2011, 10:06:31 PM
 #37

It was common sense for any miner to immediately sell his coins as they were mined on an almost daily basis. Most did.
I know I did thank goodness. Selling at 17 for example feels like a great move. Selling at 12 feels like a great move.

The question is what do you do today? I pretty much just hold onto my coins for several days and try to pick a high
moment to sell. Obviously that means a price above 8.50 for now.

So i also feel smug ;-) Well for the moment. heh.
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September 05, 2011, 10:08:27 PM
 #38

It was common sense for any miner to immediately sell his coins as they were mined on an almost daily basis. Most did.
I know I did thank goodness. Selling at 17 for example feels like a great move. Selling at 12 feels like a great move.

The question is what do you do today? I pretty much just hold onto my coins for several days and try to pick a high
moment to sell. Obviously that means a price above 8.50 for now.

So i also feel smug ;-) Well for the moment. heh.

Wish I had sold all at $10 range. Still holding about 15 BTC and can't wait for the price to rally to sell into...

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September 05, 2011, 10:26:36 PM
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Or just about the timescales involved
I beg to disagree, I feel that the less bitcoins circulate the more value they lose.

If it's used like a currency, if it circulates, if people are trading with them then mechanically more people will use them, more people will accept them, they will necessarily gain value and remain stable.

Waiting 20 years won't make them anymore valuable if everyone hoards them...

Somehow I feel it's like a self balancing mechanism Smiley
I think he's right about timescales being relevant.  Here's some possible reasons:

  • It takes time to build confidence in the technical implementation; e.g. before people are going to start trusting this system with significant amounts of their value, they'll first want to see a good track record of it doing it safely for others.
  • I expect the limited supply of bitcoins to act as a kind of friction to their diffusion into the economy; if they starts to diffuse too fast, then the necessary exchange rate rises will tend to cause speculative manias, and the inevitable crashes will stifle adoption until a solid price support is revealed over time.
  • Exchange rate run-ups likely attenuate actual use since I imagine this would cause people to want to hoard their bitcoins.
  • Quick run-ups also seem to cause "early adopter envy", which likely prevents many people who would otherwise begin using Bitcoin from doing so at that time, and for some time afterward.  People don't appear to like seeing others get rich while "doing nothing", especially if they recognize their actions to be the cause of it.
  • The legal uncertainty surrounding Bitcoin should cause people to refrain from trusting it with large amounts of their value.  Clarity here will be reached at government speed, i.e. years.
  • Technical development of core and supporting infrastructure happens slowly, on the order of years.  And again, it takes time to build confidence in these new systems, and the improvements made to old ones.
  • While the core foundation isn't yet mature, the developers (Gavin at least) are suggesting people refrain from actively promoting Bitcoin.
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September 05, 2011, 10:29:39 PM
 #40

Yeah that graph doesnt work.  It is a here we go again, it has been falling, for awhile now and in the 7s today.  We had a nice stable 12 to 14 for awhile, then some drops to around 9 and now all the way in the 7s.  That would be a a HERE WE GO AGAIN.  If you showed a graph over a year where it went from 11 to 7, back and forth up and down for a year then yeah it would just be where the market runs, but this is a free market, and any time the price starts dropping 3 to 4 dollars theres a risk of it dropping off the earth down to 2 bux a coin.

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