A Question About Volatility

[serenitys]

Am I wrong in my n00bsque opinion derived from a mere 2 days of researching and reading about bitcoin from a knowledge base of zero on the topic, that there probably isn't likely going to be another point for bitcoin value to drop below the $100 mark - or maybe once more before it begins its upward climb to mainstream adoption?

I'm getting the impression that the volatility is more in the scared, skittish sorts bailing out the second the media tells them anything negative about bitcoin, and not the actual value of bitcoin itself. That, to me, seems like artificial market manipulation more than the actual value of bitcoin being lost, so when the media starts hollering abandon ship, it's really to get the chickens out of the way and drive the price down so they can swoop in and get BTC - with real value - at a deal (or steal). Is that what's happening?

Also, how does the price/value work? It seems like it's that simple but since this is new to me and I've reached information overload in 36 hours, I'm not convinced this isn't way more complicated and technical than "buy low, sell high"

So if I purchased 1 btc today at $480 and tomorrow China officially bans bitcoin, the US starts yapping about banning it, and all the skittish people jump overboard, the value drops below $100, technically I lost money, but if the media says WalMart will start accepting bitcoin and the value suddenly jumps to $1000, did I double my money? Do I have 2 bitcoins and change? How does this work? Am I missing something?

I totally get the speculation part and it's kind of exciting (is that bad? ) wondering if I should wait til the next media beat down for the price to drop to a more "appealing" range ($100 or less) and jump in then, or just fork over $500 and buy one, and let it ride the wave.

Advice?

(And by advice I don't mean suggesting bitcoin is doomed, I know it's not...it's emerging. These are growing pains is what it looks like from here)

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[5thStreetResearch]

The Bitcoin network has yet to grow into the size that speculation drove prices to.  There just is not enough business transacted in bitcoin at the moment to justify its price.  Because of this the price could still drop considerably from here.  Bitcoin is in a pretty firm downtrend at the moment, just as speculation can prices higher than is maybe justified, it can also take it lower than is warranted.  

[serenitys]

Thanks - is there somewhere you can point me to to keep an eye on the trend itself?

[amspir]

Bitcoin currently has a market cap (all bitcoins in existence x current market price of btc)  of about $6 billion USD.

Compare that to a company with a market cap similar in magnitude as the market cap of bitcoin:  Twitter (currently at $27 billion)

Twitter tanked by 24% recently, and lost more than what all the bitcoins in the world are "worth"

Until bitcoin's market cap gets bigger, it will remain volatile.

[5thStreetResearch]

Here is a chart I made...

[TKeenan]

Am I wrong in my n00bsque opinion derived from a mere 2 days of researching and reading about bitcoin from a knowledge base of zero on the topic, that there probably isn't likely going to be another point for bitcoin value to drop below the $100 mark - or maybe once more before it begins its upward climb to mainstream adoption?

Exactly half of all people involved are willing to bet bitcoin will go up from $485 and the other half are sure it will go down from $485.  That is how open and free markets work.  People are betting very large sums it will go up - and the other people are betting large sums it will go down.  If the number of people on either side shifts even slightly, the price will immediately change to reflect that until it is again 50/50.  

Absolutely nobody thinks it will go down to $100.  'likely'?  lol!  

[fonzie]

Am I wrong in my n00bsque opinion derived from a mere 2 days of researching and reading about bitcoin from a knowledge base of zero on the topic, that there probably isn't likely going to be another point for bitcoin value to drop below the $100 mark - or maybe once more before it begins its upward climb to mainstream adoption?

Exactly half of all people involved are willing to bet bitcoin will go up from $485 and the other half are sure it will go down from $485.  That is how open and free markets work.  People are betting very large sums it will go up - and the other people are betting large sums it will go down.  If the number of people on either side shifts even slightly, the price will immediately change to reflect that until it is again 50/50.  

Absolutely nobody thinks it will go down to $100.  'likely'?  lol!  

I´m almost certain that we will see a price between 50 and 150$ this year!

[5thStreetResearch]

Am I wrong in my n00bsque opinion derived from a mere 2 days of researching and reading about bitcoin from a knowledge base of zero on the topic, that there probably isn't likely going to be another point for bitcoin value to drop below the $100 mark - or maybe once more before it begins its upward climb to mainstream adoption?

Exactly half of all people involved are willing to bet bitcoin will go up from $485 and the other half are sure it will go down from $485.  That is how open and free markets work.  People are betting very large sums it will go up - and the other people are betting large sums it will go down.  If the number of people on either side shifts even slightly, the price will immediately change to reflect that until it is again 50/50.  

Absolutely nobody thinks it will go down to $100.  'likely'?  lol!  

I´m almost certain that we will see a price between 50 and 150$ this year!

Yea this would not be surprising at all.  I dont understand why some people seem so certain that this is not even a possibility.  How many of us are actually using bitcoin for day to day purchases or regular uses apart from trading or gambling?  The reality is that there are not many people doing so which makes it hard to justify a $6b market cap.

[knightcoin]

you guys are selling like crazy .. I must be rich then ...