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Author Topic: I hear all this technical analysis and all I can think is...  (Read 2209 times)
Shinobi
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September 12, 2011, 07:55:26 PM
 #21

All those who see benefit in a return to low valuation should dump their coins and help drive the hoped-for trajectory. If you truly think this correction is necessary for the success of Bitcoin, then surely you see that the long-term benefit made by dumping your coins will outweigh the loss you will incur in doing so. Am i right?



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Revalin
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September 13, 2011, 06:01:05 PM
 #22

Quote from: michaelmclees
And in 10 years, when BTC is well understood and widely used, we'll look back and chuckle.

If, not when.  I think it is very likely that another cryptocurrency may eclipse Bitcoin.  The wild speculation may prevent Bitcoin from being widely adopted.  Demurrage and dynamic inflation could fix it, but they're unlikely to be adopted in the current block chain.  And if they are adopted, it would prevent the staggering returns you hope for.


Quote from: Shinobi
If you truly think this correction is necessary for the success of Bitcoin, then surely you see that the long-term benefit made by dumping your coins will outweigh the loss you will incur in doing so. Am i right?

Yes, and I have.  I only have a small slush fund for micropayments.  Until the market returns to what I consider to be the fundamental value based on utility (cents, not dollars, see my analysis in other threads), I'm keeping my money elsewhere.

      War is God's way of teaching Americans geography.  --Ambrose Bierce
Bitcoin is the Devil's way of teaching geeks economics.  --Revalin 165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
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September 13, 2011, 06:49:24 PM
 #23

The remaining questions are 1) what does the endgame look like, and 2) does anybody care?

In the venture capital community, there are successful startups that achieve over a 10x gain, and failures that go bankrupt. But those aren't the most common case. The most likely outcome is a "zombie", a company that generates just enough revenue to pay their operating expenses but has no hope of paying back their investment.  VCs usually have a stable of zombies, which they view as annoying; they need attention, but don't make money. The founders often continue to dream of a big win, and keep trying to get more investment capital.

The endgame for Bitcoin will probably look like that.

Bitcoin has been dropping about $4 per month for three months now. With the price at $5.80 today, the end is in sight.
FreeMoney
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September 13, 2011, 07:07:22 PM
 #24

The remaining questions are 1) what does the endgame look like, and 2) does anybody care?

In the venture capital community, there are successful startups that achieve over a 10x gain, and failures that go bankrupt. But those aren't the most common case. The most likely outcome is a "zombie", a company that generates just enough revenue to pay their operating expenses but has no hope of paying back their investment.  VCs usually have a stable of zombies, which they view as annoying; they need attention, but don't make money. The founders often continue to dream of a big win, and keep trying to get more investment capital.

The endgame for Bitcoin will probably look like that.

Bitcoin has been dropping about $4 per month for three months now. With the price at $5.80 today, the end is in sight.

Just a month and a half until I can buy all the coinzzz!

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
Revalin
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September 13, 2011, 07:19:03 PM
 #25

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Bitcoin has been dropping about $4 per month for three months now. With the price at $5.80 today, the end is in sight.

I agree that it's a zombie, but I'm not sure the end is in sight yet.  I'm about as bearish as you can be and still post here, but I don't think the linear fall will continue all the way down; it'll eventually reveal itself as a hyperbola.  The small valuation makes it easy to prop up with little influx, and naive speculators will think that it's finally nearly as low as it can go and it's time to buy back in, and/or that the pittance of value they have left isn't worth selling until the Great Recovery.  I think that will become apparent and slow (but not reverse) the fall around $2-$1.

I know the bulls are pushing the log charts lately, but I love them too:



When people think "it can't possibly go any lower now!", log charts show that there is indeed a whole lot of empty white space on the bottom right where it can, in fact, keep going.

      War is God's way of teaching Americans geography.  --Ambrose Bierce
Bitcoin is the Devil's way of teaching geeks economics.  --Revalin 165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
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September 14, 2011, 04:07:59 AM
 #26

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Bitcoin has been dropping about $4 per month for three months now. With the price at $5.80 today, the end is in sight.

I agree that it's a zombie, but I'm not sure the end is in sight yet .... When people think "it can't possibly go any lower now!", log charts show that there is indeed a whole lot of empty white space on the bottom right where it can, in fact, keep going.
There's an argument for that, and it's usually made about companies in the pink sheets, where penny stocks trade. The remnant stocks of failed companies can trade there for years.  For example, the remnants of General Motors after the bankruptcy trade under PINK:MTLQQ.  The price slowly declined from $0.75 right after the bankruptcy to $0.04 in March 2011.  Some people were hanging on hoping that somehow assets would emerge from the liquidation. They didn't. The market cap was still around $25 million at the point the stock was no longer quoted. That was what you ended up with if you owned General Motors stock.
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September 14, 2011, 05:05:40 AM
 #27

Funny you should mention the pink sheets.  I've been comparing BTC's behavior to the pinks for some time.  The comparison will hold as long as BTC's price is driven mainly by speculation.

There is a difference between BTC and MTLQQ.  After you strip all the speculation away, BTC actually has a small fundamental value that will support a nonzero price as long as people continue to use it as a currency.  The thing is that price is well under a buck.  I estimate it generously at about $0.001 to $0.01.  Due to a large number of coins out of circulation (hoarding, deleted wallets), and ongoing speculation, we'll hit bottom well above that price.

So don't get me wrong, I'm not saying it's going down forever.  I just don't think that it's valid to look at a linear chart and extrapolate a line down until it crashes into the ground in a month and a half.

      War is God's way of teaching Americans geography.  --Ambrose Bierce
Bitcoin is the Devil's way of teaching geeks economics.  --Revalin 165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
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