The bitcoin charade

[Edward50]

I watched last night as the $5.7 25,000 bidwall got sold into. After that was gone someone reinforced $5.6 and $5.65 with about 15,000 BTC each. Seems like that got sold into also.

Someone also has an ask wall around $6.05 at 20K BTC.  Which I think has been moving slowly down.

Looks like there are big battles going on in the $5.00.

Now bitcoins looks to be controlled by two sides of manipulation, one side who wants the price to go up and one side who wants the price to go down. I used to think there was one side who wanted the price to go up, and just early adapters dumping their bitcoins.

These sides of the up and down are not your average bitcoin investor, they commonly buy and sell 20K walls no problem.

I am surprised so many of you have faith in bitcoin which is obviously just another form of online gambling. A price that is unstable and set by which side of the bitcoin gamblers want to push it.


My take on the current bitcoin market is:
Right now seems like the gamblers who want the price to go down are slowly winning. There seems to be very low demand lately for anybody buying bitcoins at the current price. The volume was ultra low yesterday until the bidwalls were sold into. Ultra low at like 20K bitcoins, and has been becoming low like this lately. The manipulators who are trying to push price higher will pretty much have to buy most of the coins going up. They have very few bitcoin investors helping them push it higher. They will also have to maintain the currently artificially high price they set by buying all the miner coins who routinely sell their coins after mining. Also deal with the manipulators who want price to go down ask walls now.
 If the price does get into the $4's, this will really start lots of panic sells for many of the people who bought on the way up to $7.2, and have been holding off. I think this is why they have been defending the price falling into the $4's so hard and long.

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[N12]

For the record, the 5.6 bid wall disappeared before the price went down there yesterday.

So I agree, there is huge manipulation here on the order book, and that this is still happening is unbelievable.

[cbeast]

I hope the gamblers do get scared off. Bitcoin miners are not gamblers and the network will be around even if the price goes below $1. Then I can acquire more Bitcoin. The gamblers would of course return when some major market breakthrough occurs and the price will again bubble.

[Vandroiy]

I'd not be so certain about Bitcoin miners not being gamblers/speculators. If I should make a guess, many miners hold the Bitcoins they mined for longer than a "classical" miner (e.g. in an iron mine) would, to then sell at some psychological point. This probably adds to the volatility, as a big miner is not usually also a good speculator.

[the joint]

The wall at 6.05 is there from the 10,000+ buy at around 5.95.  The price didn't go up as he'd hoped and right now it's a little too late to sell unless he wants to take a $5,000 hit.

[cbeast]

Has anyone noticed that the volume of buy and sell orders is roughly equal? This speculation is just a game mostly played by bots. The market Cap of Bitcoin isn't in the millions, it's in the thousands. If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies. That makes the value of Bitcoin purely specualtive and worthless unless something happens soon to make it a useful currency.

[bb113]

That makes the value of Bitcoin purely specualtive and worthless unless something happens soon to make it a useful currency.

Isn't the probability of something happening "soon" (for multiple definitions of soon) the driver of the speculation?

[StewartJ]

Has anyone noticed that the volume of buy and sell orders is roughly equal? This speculation is just a game mostly played by bots. The market Cap of Bitcoin isn't in the millions, it's in the thousands. If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies. That makes the value of Bitcoin purely specualtive and worthless unless something happens soon to make it a useful currency.

Cannot invest in Bitcoins because of this.

The downfall of Bitcoin will happen because it's relegated to centralized, manipulated, margin-traded USD exchanges.

Sure, it's fine for internet cash, but trade at your own risk.

[cbeast]

That makes the value of Bitcoin purely specualtive and worthless unless something happens soon to make it a useful currency.

Isn't the probability of something happening "soon" (for multiple definitions of soon) the driver of the speculation?

That is only part of the value. The more useful Bitcoin becomes, the higher it will drive speculation. Right now, there is little usefulness and the floor went to pennies in June. Mt Gox took the blame for that one, but it can happen again if Bitcoin is not adopted by a niche market. If Bitcoin finds a niche market that is in the billions of USD, then Bitcoin will find a new floor to speculate around.

[stochastic]

...I am surprised so many of you have faith in bitcoin which is obviously just another form of online gambling. A price that is unstable and set by which side of the bitcoin gamblers want to push it.


My take on the current bitcoin market is:
Right now seems like the gamblers who want the price to go down are slowly winning...

Speculation (i.e. gamblers) is what makes stable markets.  They bring liquidity into the market that allows normal people to convert fiat for bitcoin or to hedge their bitcoin in case of price volatility.  It is not speculation that is causing the volatility, it is the thin market of people actually using bitcoins for real world items and services.

...Cannot invest in Bitcoins because of this...

I think it is a pretty silly to say "invest in bitcoins."  I don't invest in USD, CAD, EUR, RMB.  I speculate for quick profits.  I don't hoard USD in my bank account or in my closet.  I keep 6 months of cash for emergencies.  The rest of my investments are in things that bring cash flow, real estate, stocks, bonds, ect.

[Technomage]

I think it is a pretty silly to say "invest in bitcoins."  I don't invest in USD, CAD, EUR, RMB.  I speculate for quick profits.  I don't hoard USD in my bank account or in my closet.  I keep 6 months of cash for emergencies.  The rest of my investments are in things that bring cash flow, real estate, stocks, bonds, ect.

Comparing Bitcoin to USD or EUR doesn't make sense. From an investing perspective Bitcoin is closer to gold or a technology stock than it is to any actual currency. Bitcoins are a useful and very scarce commodity that is certainly worth investing in. It's high risk though and that's the part that compares well to technology stocks. From pure economics perspective it's much closer to gold than USD/EUR, don't tell me that gold can't be an investment.

My only investments (since 2008) are gold and bitcoins. That's it. The rest is in EUR and most of my EUR is going to my soon to start Bitcoin startup company. Reason for this approach is that I don't put much faith in the economy right now. It's better to play it safe when there is a possibility, this decade, of a depression that rivals the great depression.

[alan2here]

If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies.

Is this true? That would mean selling a few hundred BTC would drop the market to pennies.

[Technomage]

If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies.

Is this true? That would mean selling a few hundred BTC would drop the market to pennies.

This is not true. It would take hundreds of thousands of BTC to clear the current orderbook, but that is not nearly enough to drive the price down to pennies sustainably. It would require a sell-off of probably millions of BTC to keep us at below $1.

[gewure]

If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies.

Is this true? That would mean selling a few hundred BTC would drop the market to pennies.

lol.

..seriously, STOP THE FUD. don't you see what you do to half the ppl who come into this speculation forum?! - you make them cynical bears which leech for bitcoins death in order to profit a little bit.

i can't tell you how wrong the quote above me is.

sell some hundred coins -> nothing happens! seriously, what else do you exspect?!

sell some thousand coins -> nothing happens!

sell some hundred thousand coins -> price drops, yes, what the fuck else?!


disclaimer: excuse my rant, i kind of ate a neo-stalinist today..

[Explodicle]

FWIW if Bitcoins dropped to pennies I would buy a shitload of them, but I don't have any standing buy orders. You have no way of measuring how many people would actually buy in at $1-3.

[alan2here]

Gewue, moderate yourself. I was asking because it didn't seem right.

[Technomage]

Gewue, moderate yourself. I was asking because it didn't seem right.

I think the rant was directed at cbeast, not you. Your question seemed genuine enough.

[cbeast]

If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies.

Is this true? That would mean selling a few hundred BTC would drop the market to pennies.

lol.

..seriously, STOP THE FUD. don't you see what you do to half the ppl who come into this speculation forum?! - you make them cynical bears which leech for bitcoins death in order to profit a little bit.

i can't tell you how wrong the quote above me is.

sell some hundred coins -> nothing happens! seriously, what else do you exspect?!

sell some thousand coins -> nothing happens!

sell some hundred thousand coins -> price drops, yes, what the fuck else?!


disclaimer: excuse my rant, i kind of ate a neo-stalinist today..

Maybe I was exaggerating a bit, but the price of Bitcoin fluctuates hundreds of percent just based on someone buying or selling a few tenths of a percent of the available Bitcoin. I agree that I would and do buy Bitcoin regularly at the available price when funds are available. I watch mtgox live, and it does not take trading more than a few thousand Bitcoin to significantly change the price.

[Crypt_Current]

If someone suddenly decided to sell a few thousand dollars worth of bitcoin, the price would drop to pennies.

Is this true? That would mean selling a few hundred BTC would drop the market to pennies.

lol.

..seriously, STOP THE FUD. don't you see what you do to half the ppl who come into this speculation forum?! - you make them cynical bears which leech for bitcoins death in order to profit a little bit.

i can't tell you how wrong the quote above me is.

sell some hundred coins -> nothing happens! seriously, what else do you exspect?!

sell some thousand coins -> nothing happens!

sell some hundred thousand coins -> price drops, yes, what the fuck else?!


disclaimer: excuse my rant, i kind of ate a neo-stalinist today..

Maybe I was exaggerating a bit, but the price of Bitcoin fluctuates hundreds of percent just based on someone buying or selling a few tenths of a percent of the available Bitcoin. I agree that I would and do buy Bitcoin regularly at the available price when funds are available. I watch mtgox live, and it does not take trading more than a few thousand Bitcoin to significantly change the price.

"ONLY a few thousand, MERE DROPS, MWAHAHAHAHA"... ::: adjusts monacle, tips top hat :::

[JusticeForYou]

What one calls gambling another calls speculating.

Is speculating good or bad for a market?

The biggest outrage that most would complain about is 'Cornering of the Market.'  However, even a Cornered Market behaves in predictable ways. Some might say, more so because it is in the interest for the people doing the Cornering to maintain a price. i.e. Debeers

I believe things are maturing with bitcoins and their development. Although node shrinkage has me a little concerned.

Next Up: The BTC Spot Market for miners.