I am attempting to estimate the approximate distribution of bitcoin purchases and sales. Any input will be helpful.
My first guesstimate will focus on 4 main groups. ( please suggest others that I have missed)
1. Speculators buy and hold.
2 Arbitrage traders attempting to make short term gains
3 regular commercial activity for purchases
4 remittance users.
The first guesstimate will be based on dollar volume history here
http://www.quandl.com/BCHAIN/ETRVU-Bitcoin-Estimated-Transaction-Volume-USDBased on the May trading days
May 1-7 has an approx $31M /day volume
May 8-14 $31M/day
During this period I suggest that most traders and speculators are not active. Few arbitrage traders as the price volatility is low and there are less opportunities for making money. Few buy and hold speculators as most are waiting to see which way the price is going from the $420 ish mark.If it soundly breaks below the $400 they will wait to see how far it goes down..If it pushes above $450 and holds they will dip their toe in the water and buy
This indicates that the $31M / day volume is approximately the amount that is used in commerce and remittance activity. We already know that bitpay is using over $1m/day add the many others and we can start to get a picture of that segment.
May 15-21 $266M total approx $38M/day .from the 20th it appears that speculators are coming in as the price rises past the $450 mark. for many this is a "buy" signal and a possible reversal of the bear market.
May 22-31 ( 10 days) $740M or $74 M / day which is $430M or $43M/day above the first 2 weeks of May average
of this $430M how much is buy and hold speculators and how much is traders attempting to make quick money from price volatility?
This is the area that needs more work..I will initially assume that arbitrage trading is small (10%max) and place a $43m or $4.3m/day volume on that. therefore the buy and hold speculators account for 90% of the increase ( $430 M) in volume or $387M over the last 10 days of May.
The pie therefore (first attempt) looks like this for May 2014
1 speculators buy and hold $13M/day
2 Arbitrage/short term traders $1.4M/day
3 regular commercial activity for purchases etc. $29M / day
4 remittance activity (including avoidance of currency controls) $1.4M/day
The purpose is to gauge the commercial activity to establish a growth curve and estimate the amount of speculation as much of this will eventually be sold (particularly when we get close to major price resistance levels) and have a negative impact on the price (Temporarily)