nrd525 Market Tracker

[nrd525]

The Mt Gox bankruptcy has started a claims process.  This is good news as getting some money back is better than nothing.
http://www.coindesk.com/trustee-opens-formal-claims-process-for-mt-gox-customers/

It's pretty crazy that Mark Karpeles owes $136 million for a loan that he took from MtGox.

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[uhoh]

The Mt Gox bankruptcy has started a claims process.  This is good news as getting some money back is better than nothing.
http://www.coindesk.com/trustee-opens-formal-claims-process-for-mt-gox-customers/

It's pretty crazy that Mark Karpeles owes $136 million for a loan that he took from MtGox.

Obesity don't come cheap, especially in Tokyo.

[nrd525]

The global economy, with its record low interest rates (German 10 year bonds are yielding 0.1%, and some shorter term Euro bonds have negative yields) risks creating bubbles.  Spain 10 year bonds yielded as much as 7% in 2011, now only yield 1.5%.

While gold, oil, food, and other commodity prices are falling - we might be seeing bubbles in some property markets, and some stock markets.

http://www.bloomberg.com/news/articles/2015-04-22/as-china-stocks-outrun-the-2007-bubble-ubs-braces-for-clampdown

The bursting of these bubbles could be a nasty affair that creates recessions and possibly a worldwide one.

If we manage to slowly burst the bubbles, and global monetary policy is still loose - we could see a move from the bubbling assets to non-bubbling ones (like Bitcoin). What chance is there that this could benefit bitcoin?   And how often do crazy bubbles burst slowly?  These two conditions might be a long shot.

Greece two year bond yield (indicator of Greek default risk):
http://www.investing.com/rates-bonds/greece-2-year-bond-yield


...
Around three hours ago, someone started trading around 200 Bitcoins every minute at approximately the 40th second of the minute on Bitfinex.  They took a break and then have stopped/started a couple times, often skipping a couple minutes.  If you look at the Bitfinex one-minute chart there are a lot of minutes with volume around 200-250 (maybe 35 in the past three hours).

The price has moved down, but not as much as if someone was selling all the time.  So maybe there is both a buyer and a seller, a hidden buy wall, multiple actors, or some bots who just want to have fun.

[nrd525]

Is this choppy directionless price for BTC a sign that we're establishing the bottom and an indicator of the end of the long bear trend?

If so, we might enter a bull market or stay flat (with lots of chop) for a long time.


---

A note on "mining costs".  If you ever see someone referring to the "mining cost" of bitcoin - they are speculating.  The largest problem with this term is that it fails to distinguish between the fixed cost of buying mining hardware, and the variable cost of running it.  Miners will continue to run their equipment so long as the cost of electricity (and any other costs - like rent and wear on hardware) are less than the mining value.

In this case, the miners may be losing money on their overall investment. But once they've bought the hardware, they have the only choice of mining or not mining.  (They could sell the hardware, but they shouldn't be able to make more money by doing that - unless they sell it to someone irrational).

For the overall "mining cost" and the decision about whether it is profitable to buy new mining hardware, nobody knows what it is because nobody can predict the network difficulty.  You could predict that the BTC price will be flat (in practice it is a gamble - the price is likely to go up or down 20-100%). But you have no idea about the network difficulty.  It has recently switched from having average increases of 7-10% each period, to 0%. But who knows whether that trend will hold. You can try to predict the difficulty by looking at betting sites like BitBet - but they lack the volume to be good indicators.

[nrd525]

I placed bid orders:
218 - 5 BTC
216 - 5 BTC
170 - 3 BTC 

(Just in case of a flash crash - If it really goes to 170, I plan to buy more)

[nrd525]

I canceled my bid orders.  Put the money back into USD swap.  

Very strange market. BTC-e's premium is back to near zero, after being 1% higher than Bitfinex and being very volatile.  Over the past couple days the Coinbase premium (over Bitfinex) was as low as 30-35 cents. Now it is back to $1.

News: there is a bid for 5000 bitcoins at $350 each from the Bitcoin Investment Trust, which is going to launch soonish.
http://www.otcmarkets.com/stock/GBTC/quote
I'm not sure if this bid is serious or will be withdrawn before it executes.  Apparently some types of investors (possibly tax-shielded retirement accounts?) cannot invest directly in bitcoin, but can invest in GBTC.  However they'd have to be fairly stupid to pay a $110 premium.  They might just be trying to make a name for themselves or pump the price.


German bond yields are back up and the 5 year bonds now have a positive yield.  This is great because negative yields are crazy (and possibly an indicator of deflation and a massive recession).  It's bad enough earning only 0.1% interest, but if you are a mutual fund with fees - you are still getting a negative return.   On the other hand, long term bond owners are sitting on nice profits from the past four years.
http://www.investing.com/rates-bonds/germany-5-year-bond-yield

[nrd525]

We are hopefully at the end of the mining "crash" (it is a crash relative to the 10-30% growth rates per period that we saw earlier).  It looks like the hash rate has stopped growing.  Is any company developing new miners?  KNCMiner has promises of a new line of 16 nm miners,  but I've also read that they are facing a class action suit for taking too long to deliver and/or not delivering on past pre-orders.  Several months ago (or more?) the founder of ASICMiner, one of the most successful miners, disappeared with investors money.

Up through 2013, bitcoin mining was extremely positive for the price - as it was a key part of the economy and very profitable.  However, with ASICs it became "hit or miss" depending on when and whether your miner got delivered.  Now with late ASICs, a bearish BTC, and cloud mining scams, mining has become a drain on the bitcoin economy (I'd love to see statistics to back this up - have bitcoin miners and mining corporations both lost money, or have the companies gained at the expense of miners or vice-versa?)

So the slowdown to zero mining growth is actually a positive for the BTC price.  

In the future, mining might have a small role to play if it again becomes profitable due to an increase in BTC price.  

[nrd525]

After the recent 30% increase, followed by only a 5-10% decrease: I'm tempted to short Litecoin (versus the USD).  This would generally increase my risk, but already having a long position in BTC would partially negate that.

I'm surprised LTC hasn't fallen to $1.6 (or lower).

[nrd525]

Bloomberg report on bitcoin
http://newsletters.briefs.blpprofessional.com/document/3o88YiJSewlwctQnzv.3UA--_39z18euvdyhzvm6y0a/commentary-investment-vs-currency

[nrd525]

Shorting 600 LTC at around $1.80 (with a current loss of -3.6%).

[nrd525]

Looks like many/most of the major alt-coins have gone up.

DOGE is up 80% in the past 30 days versus BTC
LTC is up 27.5% in the past 30 days versus BTC.
PPC is up 42%.
XMR and DRK are  down 9%.
XRP (aka Ripple) is down 3%.

When is the last time that a general increase in alt-coin value, without a smaller positive move by Bitcoin, has happened? 

Normally a small move by Bitcoin triggers a larger move by Litecoin. Most notably when Litecoin went from $1 to $40 in the fall of 2013.

I'm wondering if someone is crazy enough to try to pump Bitcoin by pumping alt-coins and hoping for spillover?  Or is this just a series of alt-coin pumps that will soon collapse?

Dogecoin is already showing signs that it might have peaked at 87, and has currently dropped to 78.

[nrd525]

The Day Trading Simulator Game, on this forum, is a great example of why day trading is bad.
https://bitcointalk.org/index.php?topic=890086.0

People started with $100 or the median amount that others had.  Currently most people have lost money:
https://docs.google.com/spreadsheets/d/1JoeyzXgMXYFq3pixDTsqkNKLJI5iz0eOU_P-tfQAny4/edit?pli=1#gid=1512098707

[Morecoin Freeman]

The Day Trading Simulator Game, on this forum, is a great example of why day trading is bad.
https://bitcointalk.org/index.php?topic=890086.0

People started with $100 or the median amount that others had.  Currently most people have lost money:
https://docs.google.com/spreadsheets/d/1JoeyzXgMXYFq3pixDTsqkNKLJI5iz0eOU_P-tfQAny4/edit?pli=1#gid=1512098707

More like a good example that most people lose money while trading. Not everyone can survive.

[nrd525]

Some controversy at Okcoin which is negative for bitcoin price.   The Roger Ver controversy isn't too relevant (unless it provides confirmation of general shadiness?), but the accusations from a former employee about their other practices (encouraging employees to trade, running bots, faking volume, not meeting contract obligations, faking the proof of reserves) are pretty disturbing:

http://www.reddit.com/r/Bitcoin/comments/37tm1b/czs_statement_regarding_the_dispute_between/

and the OKcoin response:
http://www.reddit.com/r/Bitcoin/comments/37u6ca/okcoins_response_to_czs_lies_and_desperate/

[nrd525]

Closed half my LTC short (200 at 1.71, 100 at 1.66).

Planning to close the rest between 1.61 and 1.51.

Interesting that it is dropping without BTC falling.  This looks like a general decline in several major altcoins, that followed a general rise in them.  It looks like the decline in altcoins has further to go (I'd love to short DOGE).

After this altcoin action, maybe the pumpers and speculators will try something with BTC where volatility is at a several month low.

[nrd525]

Closed another 100 of the LTC short at 1.61.  Felt bad at the time (as it fell to 1.58), but looks much better now.  Of course I hope the LTC bounce doesn't last as I still have a 200 short position to close.

[nrd525]

The deployment of KNC's new 16 nm miners is bad news.  The overall bitcoin mining industry is zero sum.  The hash rate is possibly 1000 to 100,000 times greater than that which is required to secure the network.  So this means that new miners are benefiting at the expense of old miners.  As the most recent generation of ASIC miners has probably lost a lot of money (due to shipping delays, the bear market, and high fixed costs that are hard to recuperate), this is not good.

http://www.coindesk.com/kncminer-deploys-next-generation-16nm-bitcoin-asic/

[nrd525]

BFX USD swaps up $1 million in the past 24 hours and now at $27.4 million. Highest since August 2014!

BTC swaps also up 1400 BTC in the past 24 hours and now at 27,700  Though this is 6500 below peak.

Traders probably think we'll bounce back to $240.

[nrd525]

BFX USD swap at $27.7 million.  Another $1.5 million is available at the flash return rate - so that is significant room for growth in longs.

BFX BTC swap is down by a massive 6000 BTC (from 27700 to 21600).

Price up from $223 to $228, since my last post.  The $2 BTCe premium over Bitfinex has narrowed to 80 cents.

[nrd525]

If the cost of mining a BTC is less than the price, what happens?

Either the price could fall to the mining cost OR people could buy more miners and increase difficulty - thus increasing the mining cost.

More people seem to believe that the price will fall to the mining cost.

It seems like the price could move more easily than someone could buy miners as mining hardware companies have notoriously slow delivery times.  You cannot buy miners that don't exist!  On the other hand, the BTC price is also influenced by speculators and somewhat immune to fundamentals.

Also the fact that mining hardware companies make their plans for new designs six months or more in advance, means that they are acting based on old prices.  So they have probably been overproducing hardware during the bear market - unless they predicted the extent to which it would fail (or were risk adverse).  When their products come to market - they are likely to sell them at a discount and possibly an economic loss to themselves. In this case, the hardware manufacturer's loss is the miner's gain. As new miners can be more efficient than the old.

I'm still not sure what the ramnifications are.  What do people think?