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Author Topic: Stable Exchange Rate?  (Read 5953 times)
FreeMoney
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September 25, 2010, 09:43:38 AM
 #21

Life has unknown opportunity costs. The exchange rate is a piece of knowledge that can help us learn a bit about what those opportunity costs are. A sudden change in rates simply means that a lot of people just revalued at least one of the things being compared.

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September 25, 2010, 04:36:28 PM
 #22

I expect the rate to go down on the medium-term (3-6 months). Only a small percentage of the bitcoins in existence are being actively traded, and a great number are known to be owned by people (not lost). I also suspect that the rate of inflation is greater than what the market can absorb.

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September 25, 2010, 05:05:37 PM
 #23

we will see what happens, the market will tell us :-)

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September 25, 2010, 06:16:07 PM
 #24

Agree, media coverage it a factor that can significantly impact the bitcoin economy, to the positive or to the negative.

From a bitcoin trading perspective  , the only thing that counts is the price action resembled by the price charts.

The chart can already be used well for technical analysis, and this in my p.o.v is poised for a breakout on the upside towards 0.08-0.09

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September 25, 2010, 06:25:12 PM
 #25

I also suspect that the rate of inflation is greater than what the market can absorb.
That will depend on whether Bitcoin gets substantial coverage in the mainstream media.

I would argued that mainstream media is not just one of the factor. One possibility is that the booming amount of web services that accept bitcoin will drive the price of bitcoin up. If the media noticed the growing number of web services accepting bitcoins, than it goes to reason that media are compounding factors.

It's a chicken and the egg thing.

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September 27, 2010, 09:55:02 PM
 #26

Just seen that in the bitcoinwatch.com site we have Russian Rubles included.

Great progress!

Where is EUR and JPY?

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September 27, 2010, 10:07:01 PM
 #27

Just seen that in the bitcoinwatch.com site we have Russian Rubles included.

Great progress!

Where is EUR and JPY?

Where is an open market for EUR and JPY?

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September 28, 2010, 09:30:33 PM
 #28

I have not seen any open market for EUR or JPY

By the way, the difficulty for block generation just increased from 917 to 1318.

This should boost the BTC/USD rate, all other things being equal.

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September 29, 2010, 01:19:38 AM
 #29

I have not seen any open market for EUR or JPY

By the way, the difficulty for block generation just increased from 917 to 1318.

This should boost the BTC/USD rate, all other things being equal.

The relationship between the difficulty and the exchange rate is complex.  Probably too complex to even define.  I doubt that it will have a noticable effect on the exchange rate.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

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September 29, 2010, 01:28:56 AM
 #30

I don't think the difficulty will affect the exchange rate.

7200 BTC will be created daily (on average) no matter what. Whoever gets this is generating, which means they find the current difficulty to be profitable for them. They might bet that the value of BTC will increase in the future, but they can't force an increased rate on the market right now -- no one would accept their offer.

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October 01, 2010, 04:59:41 PM
 #31

So we are one month into an astonishing stable exchange rate period despite high inflation rate.

But we all know that stability cannot last forever....

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October 01, 2010, 05:26:58 PM
 #32

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

And by the way, over the last month, BTC value has dropped -10 to -20% vs most currencies. It held up in dollar terms, but at the same time the dollar fell against most other currencies.

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October 01, 2010, 05:29:13 PM
 #33

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

Volatility is only low because volume is low.  Volatility will go through the roof the instant we get any amount of volume.

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October 01, 2010, 05:49:37 PM
 #34

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

Volatility is only low because volume is low.  Volatility will go through the roof the instant we get any amount of volume.


So 10,000 of bitcoin getting sold no longer have a great effect on the volatility of bitcoins?

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October 01, 2010, 06:36:51 PM
 #35

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

Volatility is only low because volume is low.  Volatility will go through the roof the instant we get any amount of volume.


Volume used to be lower and volatility was higher, this is what I would expect. Why do you think the opposite? Something to do with bitcoin in particular?

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October 01, 2010, 08:22:11 PM
 #36

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

Volatility is only low because volume is low.  Volatility will go through the roof the instant we get any amount of volume.


Volume used to be lower and volatility was higher, this is what I would expect. Why do you think the opposite? Something to do with bitcoin in particular?

No, just comparing relative to just about any other global market Smiley  The average bitcoin USD-equivalent daily transaction volume (150000 BTC * 0.07 USD, rounding up generously) is less than $10,000/day.  That's all bitcoin transactions, including maintenance transactions such as moving bitcoins from one wallet to another.  Even compared to the smallest pink sheet stock, BTC dollar volume is tiny.

That's a drop in the bucket, for anyone who calls themselves an investor Smiley

I consider the current BTC volume quite low.  Market prices would be easy to manipulate, as its current, tiny, size.

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October 01, 2010, 08:33:49 PM
 #37

Is there some way of manipulating that does not reduce to paying more than you need to to buy bitcoins or getting less than you could for selling them? Those two sound like gifts to me.

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kiba
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October 01, 2010, 08:35:25 PM
 #38

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

Volatility is only low because volume is low.  Volatility will go through the roof the instant we get any amount of volume.


Volume used to be lower and volatility was higher, this is what I would expect. Why do you think the opposite? Something to do with bitcoin in particular?

No, just comparing relative to just about any other global market Smiley  The average bitcoin USD-equivalent daily transaction volume (150000 BTC * 0.07 USD, rounding up generously) is less than $10,000/day.  That's all bitcoin transactions, including maintenance transactions such as moving bitcoins from one wallet to another.  Even compared to the smallest pink sheet stock, BTC dollar volume is tiny.

That's a drop in the bucket, for anyone who calls themselves an investor Smiley

I consider the current BTC volume quite low.  Market prices would be easy to manipulate, as its current, tiny, size.

A guy brought lot of bitcoins on mtgox and it didn't exactly goes as planned.

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October 01, 2010, 08:43:11 PM
 #39

A guy brought lot of bitcoins on mtgox and it didn't exactly goes as planned.

define "lot"?

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kiba
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October 01, 2010, 08:47:04 PM
 #40

34209.3 bitcoins lot.

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