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[teflone]

I will start using bitcoinica again when bitcoinica stops using Mtgox for its trading..

This is the problem..  Zhou, your the only man out there that can compete, better to do it now, then wait for the compitition to catch up.

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[zhoutong]

Price is only a dollar lower than yesterday, how does that hurt anyone besides speculators and people leveraged on bitcoinica?

Surely you are joking. Bitcoin lost 20% in a single day. That's bad enough - puts it in a league with pennystock in the eye of the beholder. Worse is that it was like an epileptic seizure. I mean going between 4.64 and 6.95 within minutes! Doubt this will inspire much confidence  in everyone watching.

The good news is that a number of gamblers got bloodied up good. As Vandroiy said before: That's the silver lining.

Bitcoin IS a penny stock in terms of fundamentals. (Market cap is only $550MM.) So how can we expect it to perform like a blue chip?

Without price rising to above $100 (That's about $9 billion market cap), we can never have a stable day.

With or without Bitcoinica, $200K is sufficient to push the price from 4.64 to 6.95 within minutes. And without Bitcoinica, that would happen too (Bitcoinica volume was insignificant during the rally you mentioned).

[anu]

Bitcoin IS a penny stock in terms of fundamentals. (Market cap is only $550MM.) So how can we expect it to perform like a blue chip?

Without price rising to above $100 (That's about $9 billion market cap), we can never have a stable day.

With or without Bitcoinica, $200K is sufficient to push the price from 4.64 to 6.95 within minutes. And without Bitcoinica, that would happen too (Bitcoinica volume was insignificant during the rally you mentioned).

It's within your power to remove some of the penny stock characteristics. Not all, I give you that. May I suggest that you introduce instruments that reduce volatility in addition to those that amplify it?

[DarkEmi]

Bitcoin IS a penny stock in terms of fundamentals. (Market cap is only $550MM.) So how can we expect it to perform like a blue chip?

Without price rising to above $100 (That's about $9 billion market cap), we can never have a stable day.

With or without Bitcoinica, $200K is sufficient to push the price from 4.64 to 6.95 within minutes. And without Bitcoinica, that would happen too (Bitcoinica volume was insignificant during the rally you mentioned).

Current Market Capitalisation is more around 50 Millions and 100$ would make it around 700 millions$

[Mushoz]

Bitcoin IS a penny stock in terms of fundamentals. (Market cap is only $550MM.) So how can we expect it to perform like a blue chip?

Without price rising to above $100 (That's about $9 billion market cap), we can never have a stable day.

With or without Bitcoinica, $200K is sufficient to push the price from 4.64 to 6.95 within minutes. And without Bitcoinica, that would happen too (Bitcoinica volume was insignificant during the rally you mentioned).

It's within your power to remove some of the penny stock characteristics. Not all, I give you that. May I suggest that you introduce instruments that reduce volatility in addition to those that amplify it?

Like what?

[zhoutong]

Bitcoin IS a penny stock in terms of fundamentals. (Market cap is only $550MM.) So how can we expect it to perform like a blue chip?

Without price rising to above $100 (That's about $9 billion market cap), we can never have a stable day.

With or without Bitcoinica, $200K is sufficient to push the price from 4.64 to 6.95 within minutes. And without Bitcoinica, that would happen too (Bitcoinica volume was insignificant during the rally you mentioned).

Current Market Capitalisation is more around 50 Millions and 100$ would make it around 700 millions$

My bad. Math...

[realnowhereman]

Speculators who are making profits by feeding the wild swings are defecating in the river from which they drink.

Speculators "feeding" the swing are what dampens it, not what creates it.

All those dirty speculators, eh?  Putting in lots of buy orders for cheap bitcoins when the price fell; driving the price back to where it was...

[Dutch Merganser]

Price is only a dollar lower than yesterday, how does that hurt anyone besides speculators and people leveraged on bitcoinica?

Surely you are joking. Bitcoin lost 20% in a single day. That's bad enough - puts it in a league with pennystock in the eye of the beholder. Worse is that it was like an epileptic seizure. I mean going between 4.64 and 6.95 within minutes! Doubt this will inspire much confidence  in everyone watching.

The good news is that a number of gamblers got bloodied up good. As Vandroiy said before: That's the silver lining.

Bitcoin IS a penny stock in terms of fundamentals. (Market cap is only $550MM.) So how can we expect it to perform like a blue chip?

Without price rising to above $100 (That's about $9 billion market cap), we can never have a stable day.

With or without Bitcoinica, $200K is sufficient to push the price from 4.64 to 6.95 within minutes. And without Bitcoinica, that would happen too (Bitcoinica volume was insignificant during the rally you mentioned).

Bitcoin is like a penny stock? Oh, say it isn't so! 

All kidding aside, it's good to see at least a couple people involved with bitcoin know the difference. Also, the point about the magnitude of the volatility should not be overlooked. I've seen quite a few comments dismissing the volatility of bitcoin on the basis that other assets exhibit volatility. You don't see this kind of volatility in much other than distressed currencies like the Zimbabwi dollar or out and out money raising scam vehicles like penny stocks. That is to say, right now bitcoin trades like a piece of crap that almost no one should take seriously.

I'm not trying to start another argument on this subject with anyone, as it simply is what it is. Zhoutong's example of how little money it takes to move the price of bitcoin should be self-explanatory.

During the 1990s I made the acquaintance of some professional penny scammers and had a hypothetical discussion about what it might take to do it. The suggestion was to look for vehicles that could be manipulated with an investment of around $500K more or less. So, by that yardstick being able to create a 50% price swing for $200K current is actually a real bargain, such a deal 

[anu]

During the 1990s I made the acquaintance of some professional penny scammers and had a hypothetical discussion about what it might take to do it. The suggestion was to look for vehicles that could be manipulated with an investment of around $500K more or less. So, by that yardstick being able to create a 50% price swing for $200K current is actually a real bargain, such a deal 

That is interesting. Could you elaborate?

( In my understanding the whole thing is a zero sum game. I always profited when I set orders that are ridiculously far away from the current price. Like last night, my order at $5 triggered. When I got up, I could sell it again on the way to the shower at a nice profit. I think a number of ppl use this strategy. As this is a zero sum game, someone must have made loss for our gains. In my understanding it must have been the guys who caused these spikes. How am I wrong?)

[Dutch Merganser]

During the 1990s I made the acquaintance of some professional penny scammers and had a hypothetical discussion about what it might take to do it. The suggestion was to look for vehicles that could be manipulated with an investment of around $500K more or less. So, by that yardstick being able to create a 50% price swing for $200K current is actually a real bargain, such a deal 

That is interesting. Could you elaborate?

( In my understanding the whole thing is a zero sum game. I always profited when I set orders that are ridiculously far away from the current price. Like last night, my order at $5 triggered. When I got up, I could sell it again on the way to the shower at a nice profit. I think a number of ppl use this strategy. As this is a zero sum game, someone must have made loss for our gains. In my understanding it must have been the guys who caused these spikes. How am I wrong?)

It depends on who you mean when you say "caused the spikes". If I bought at 3.50 in December, ran a promotion over a few weeks to draw in new money, then sell to the new money at prices up to 7, I'm good and the "new money" is now part of the zero-sum game. I think in the sense you mean that those "new money" buyers caused the spikes and when they sold to you they took a loss.

There was a lot of bullish talk going around, for example IIRC hyping of "The Good Wife" episode started in this forum in December. The pitch was that this would bring in "new new money", persons who hadn't bought bitcoins previously, and the pitch ( one would hope ) caused persons already predisposed to buy coins to buy more with their dirty, dirty fiat currency that no one would ever want 

BTW, I'm not claiming I had any part in this, I just know the drill and saw a play going down I've seen before.

The other piece of the big swing appears to have been forced liquidations on Bitcoinica. One could make a case that the dreaded asterisks became bullseyes for sellers using relatively little capital. The details don't really matter, the important property of the set up are conditions where a little capital can trigger a big price change as Zhoutong describes.

[racerguy]

I think bitcoinica helped squash a forming bubble, without that smackdown we would probably be at unsustainble prices now/very soon.

[stochastic]

Bitcoinica is the winner because of the fees/spreads.

Zhoutong is in an ideal position for insider trading. He could easily have made BTC 50K last night from the gullibility of those gamblers. Spreads and fees are only a facade to pretend this is an "honest" business.

Well Bitcoinica is a market maker.