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Author Topic: Thinking about buying more coins  (Read 3153 times)
rebuilder
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January 19, 2012, 03:41:14 PM
 #41

The general assumption here seems to be that if you want to sell a lot of coins, it's best to do it slowly. I'm not sure that's true. Say you hold a few hundred thousand Btc and you want to cash out. How long will that take to do in drops. I think quite a while. Either you act very patiently and carry the risk of market fluctuation, or you sell your coins at a higher volume. In the latter case, you may find yourself setting a price ceiling, which is problematic because people are investing with an expectation of further growth. If price growth gets cut off due to your selling, you may trigger a downtrend, which you don't want since you want to cash out.

So what if you decide to spread your selling out, but not evenly, rather in clumps? Every now and then, you will trigger massive turmoil in the markets, but is that a bad thing for your profits? Maybe people will just look at your huge sales, shrug and write them off as anomalies, and growth continues. You wait a while and drop another load of coins, people treat it as an act of god and the carousel keeps spinning.

Selling out to advertisers shows you respect neither yourself nor the rest of us.
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proudhon
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January 19, 2012, 04:04:41 PM
 #42

The general assumption here seems to be that if you want to sell a lot of coins, it's best to do it slowly. I'm not sure that's true. Say you hold a few hundred thousand Btc and you want to cash out. How long will that take to do in drops. I think quite a while. Either you act very patiently and carry the risk of market fluctuation, or you sell your coins at a higher volume. In the latter case, you may find yourself setting a price ceiling, which is problematic because people are investing with an expectation of further growth. If price growth gets cut off due to your selling, you may trigger a downtrend, which you don't want since you want to cash out.

So what if you decide to spread your selling out, but not evenly, rather in clumps? Every now and then, you will trigger massive turmoil in the markets, but is that a bad thing for your profits? Maybe people will just look at your huge sales, shrug and write them off as anomalies, and growth continues. You wait a while and drop another load of coins, people treat it as an act of god and the carousel keeps spinning.

For the sake of bitcoin, I sincerely hope that people holding many tens of thousand to hundreds of thousand coins cash out over the next year or so, and that they do so in a way that distributes their coins among a large number of people.  Let's get this over with.  The project isn't going to be able to move along and gain the level of trust it needs until the risk of enormous dumps is significantly reduced.
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January 19, 2012, 04:07:03 PM
 #43

A killer bitcoin app will eventually emerge that will propel bitcoin into the massive mainstream.  The creation of "Netscape" was the eureka moment that had tons of developers evolved BBS to HTML and web browsing.

I am working on one myself...stay tuned!

Yes, and that will be the ability to do a Stop Loss Order on Mt Gox....
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January 19, 2012, 04:34:11 PM
 #44

For the sake of bitcoin, I sincerely hope that people holding many tens of thousand to hundreds of thousand coins cash out over the next year or so, and that they do so in a way that distributes their coins among a large number of people. Let's get this over with.  The project isn't going to be able to move along and gain the level of trust it needs until the risk of enormous dumps is significantly reduced.
I don't think there is any hoping required. This happens naturally because hoarders are people and they have different mindsets. Some will be happy to sell some or all of their coins when the price has increased 100%, some will wait for 1000% and some for 10000% or in some cases even 100000%. Some of them simply invest for 2 years and exit. Some will never sell but will use those coins gradually once they become more usable.

One thing is for sure, only a very small minority of users will be able to resist the temptation of not selling coins at some point while we go towards the price of $1000, for example. The distribution of coins is very likely to get better and better as time goes on. But even if this issue is reduced, it's never removed. As with any other currency, there are always big players who can affect the price. Even now someone with millions of dollars could buy a lot of coins at any time and if that person happened to be one of the so called super-hoarders, his actions could have a significant effect in the long term future.

I also think that the people who actually have the patience to keep money in bitcoins for years without worrying about the short term volatility, they are smart people. It's very unlikely that these people would suddenly just sell everything in year 2020 and crash the market, they would know better. It's the speculative types we need to worry about just like we've seen with Bitcoinica recently. But their effect will undoubtedly get smaller through time once the market cap is larger and there are more large competing speculators.

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January 19, 2012, 04:38:21 PM
 #45

I am thinking of buying more coins.

This is what it involves...

Sell some shares... Wait three working days for money to be available for withdraw from trading site

Withdraw money to bank account... Wait three working days for money to be available in bank account

Move money to Bitcoin trading account... Wait three working days for money to clear

Buy some Bitcoin... umm, depends on how good a price I want to hold out for how long this stage will take

Send Bitcoins anywhere; a different trading account or the personal wallet of any bitcoin user... one hour

As for the price stability, that will come once the financial infrastructure exists, things like widely used and traded options. Once you can make easy money from pure volatility, a lot of it will be traded away.

"Remember too on every occasion which leads you to vexation to apply this principle: not that this is a misfortune, but that to bear it nobly is good fortune." - Marcus Aurelius
proudhon
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January 19, 2012, 05:13:51 PM
 #46


One thing is for sure, only a very small minority of users will be able to resist the temptation of not selling coins at some point while we go towards the price of $1000, for example.

What I'm suggesting is that the price isn't go to go anywhere close to $1000, or even $50 for that matter, until this threat is significantly reduced and trust is much higher.
StewartJ
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January 19, 2012, 05:58:44 PM
 #47

I am thinking of buying more coins.

This is what it involves...

Sell some shares... Wait three working days for money to be available for withdraw from trading site

Withdraw money to bank account... Wait three working days for money to be available in bank account

Move money to Bitcoin trading account... Wait three working days for money to clear

Buy some Bitcoin... umm, depends on how good a price I want to hold out for how long this stage will take

Send Bitcoins anywhere; a different trading account or the personal wallet of any bitcoin user... one hour

As for the price stability, that will come once the financial infrastructure exists, things like widely used and traded options. Once you can make easy money from pure volatility, a lot of it will be traded away.

I am liquidating some of my bullion silver directly into BTC or Gox Redeem Codes.  (see my forum signature)

Love the liquidity of this stuff...
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