"Good news" vs. price

[rebuilder]

Let's ponder a question: what kind of news is good news for the price?

Lately there's been a lot of good news of the "Expedia accepts Bitcoin" and "New bitcoin ETF coming" variety, yet  a rally is decidedly not underway. Why would this be?

Maybe it's relevant that while these new developments may increase Bitcoin's utility to existing holders, or provide avenues for new speculators, they bring little to the table to increase adoption of Bitcoin in the short to medium term. Competing as a payment method for traditional online commerce is a tough proposition for Bitcoin: Niche cases apart, credit cards work just fine for most consumers. Merchants would have to systematically offer high discounts for their customers to deal with the added hassle and high volatility of buying BTC just to pay for their purchases.

As for increased investor demand, that can't supplant fundamental growth of the ecosystem. New funds etc. may end up running the price up again, but if Bitcoin doesn't gather true utility for non-speculative demand to catch up, it's a bubble waiting to happen at best.

The most ambitious promise of Bitcoin, IMO, is to introduce sound money into commerce, reducing the deleterious effects of debt bubbles. It's an ambitious goal to say the least, but I don't see a noble idea driving consumer adoption. Most people do not voluntarily inconvenience themselves for the future greater good absent incentives in the here and now.

So, what are the incentives that will drive Bitcoin to true mainstream adoption? What is the pitch at this point?

P.S. This is a self-moderated thread - signal, not noise, please!

[spiderbrain]

I think international money transfer and offshore banking are two areas where it already beats the established competition hands down.

[twiifm]

I think international money transfer and offshore banking are two areas where it already beats the established competition hands down.

Those things are niche needs not mainstream.

[gentlemand]

I think international money transfer and offshore banking are two areas where it already beats the established competition hands down.

Those things are niche needs not mainstream.

Multi trillion dollar niches.

[dadugan]

Good news are news that create demand on the buy side.

"Expedia accepts Bitcoin"
This one creates a conduit for existing holders to spend their coin. So this is actually the sell side of the supply curve and the supply comes from early bitcoin adopter.


"New bitcoin ETF coming"
This one is mixed news. Depend on if the inflow of wall street is greater than outflow of the money. Winklevoss brothers are obviously trying to sell their position to investor wall street. If they are willing to hold and convince investor to pay, then this create demand. Which should considered "good news".

[giveBTCpls]

We need BTC accepted in places where normalfags do their daily online consumism, aka eBay and Amazon. Once we get there the "Pay with Bitcoin" button people will think what the hell is that? Then google "Bitcoin" and learn about it. It's the only way. Normalfags aren't going to be checking underground news anytime soon.

[Hyena]

We need every single one of us speculation fags to spread the word and not just sit here waiting for the others to do the job. Contact merchants and demand them to accept bitcoin. Below is my latest missionary work, feel free to duplicate:

Hello friend, thanks for the tip, however, not too many people know about
bitcoins and its a bit confusing. i'll see that as a option in the future.


On Mon, Sep 1, 2014 at 6:31 PM, Hyena wrote:

> From: Hyena
> Subject: bitcoin payments
>
> Message Body:
> Hi!
>
> Please consider accepting bitcoin payments. Vendors selling Syrian Rue
> seeds from Iran have already successfully used that payment option for
> example. The good thing about bitcoin is that there is no middle man that
> would take their share, so by paying with bitcoin one is not supporting the
> global banking system.
>
>
> --
> This mail is sent via contact form on Buy Ayahuasca | Ayahuasca For Sale
> http://www.soul-herbs.com
>
>

[razorramon]

We need BTC accepted in places where normalfags do their daily online consumism, aka eBay and Amazon. Once we get there the "Pay with Bitcoin" button people will think what the hell is that? Then google "Bitcoin" and learn about it. It's the only way. Normalfags aren't going to be checking underground news anytime soon.

still no newbies will join the club because the price is basically declining since months...you must be really stupid to buy in for the first time at this point

[rebuilder]

Deleted a couple of off-topic posts.

So, summing up so far:

-Remittances and offshore banking are niches where Bitcoin may be better suited than the alternatives
-Retailer acceptance is of dubious value short-to-midterm
-Price volatility is offputting for new users.

Regarding the first, I'm not convinced Bitcoin is likely to gain traction for money transfers or store of value uses without other large-scale adoption. Those are big niches in the traditional finance world, but don't they essentially piggyback on stability generated by other mechanisms, including wide consumer adoption? This is essentially the ledger use case of bitcoin, which it does well, but can people be convinced to count their wealth in an unit not in widespread commercial use?

As for retailers, I think that was addressed before. If Bitcoin enables commerce that is otherwise impossible, or can be used to achieve significant savings in commerce, that's a good use case. Bitcoin does enable certain forms of commerce, see Silk Road etc. that many dislike. How likely is it to compete with credit cards where those are already working payment methods, though? Not very, IMO, without significant reduction of the risks involved in buying and holding BTC.

-Volatility... A bit of a chicken-and-egg problem. You have to increase adoption to increase price inertia and lock-in effects, but it's hard to sell people on the idea of buying BTC if they just want to buy things and are risk-averse, which most people not yet using BTC are IMO.

What I'm getting at here is that to succeed, Bitcoin has to live up to its original promise of being revolutionary. We've established that it has been game-changing in certain fields where for legal reasons other payment methods are difficult or impossible to use. Are there other niches left undiscovered? Or am I wrong about the difficulty of competing as just another payment method for the things people buy with their usual means anyway? Or are we going to see a real boom in gray and black market trade, enabled by Bitcoin?

[ensurance982]

I think official endorsements of governments or at least definitely positive regulatory guidelines are a very good thing for Bitcoin. I think a lot of people wonder how the regulatory questions play out in the long term. If we indeed see Bitcoin-friendly Bit-Licences, it would be something that gives people safety and will make them strongly considering getting involved if they thought about doing so.
Also if very big companies, along the lines of eBay, PayPal, Amazon, accept Bitcoin it would surely be reflected by the price. Just another 'big' company like Dell accepting Bitcoin just doesn't do the trick anymore!

[Ayers]

a good news for the price, would be google/amazon accepting bitcoin, especially amazon, i would buy everything with btc and forget stupid fiat, but i'm starting to think that maybe not everyone want a decentralized system of money

[howaboutya]

The good news affect the future price, not the current one, while the bad news are the opposite.

[bitbinn]

a good news for the price, would be google/amazon accepting bitcoin, especially amazon, i would buy everything with btc and forget stupid fiat, but i'm starting to think that maybe not everyone want a decentralized system of money

i believe amazon will accept bitcoins very soon otherwise they will be left behind

[counter]

Good news can be the potential for the price to go up if you ask me.  If the price dumps due to a new company accepting Bitcoin but the news of that company attracts long term investors into Bitcoin then to me that is good news.  People used to and maybe still do say BitPay was horrible for Bitcoin and I couldn't disagree more.

[MrBtcSenior]

a good news for the price, would be google/amazon accepting bitcoin, especially amazon, i would buy everything with btc and forget stupid fiat, but i'm starting to think that maybe not everyone want a decentralized system of money

i believe amazon will accept bitcoins very soon otherwise they will be left behind

If amazon will adopt bitcoin the value will rise up to 1000$ and beyond

[Torque]

Funny how there is always a "bitcoin will go to moon when [X] happens".  There is a never ending string of these "when X happens, then moon" events, for years and years and years and years.  And once the X event does happen, then still no moon.  Then on to the next "oh well, X came and went and nothing, but lookout when Y happens!" event supposedly in the future.

Human nature: Never happy with the now, always looking for the "next thing" to be happy.

What if I say that the current price reflects ALL good news events priced in for the next 5 years?  Depressing? (not that I believe that, but just for sake of argument)

[jbrnt]

I honestly believe "x accepts bitcoins" is good news in the long run even when they seem to drive prices down now. The only thing that coild drive prices up is more people thinking "bitcoin is going to be great in the coming years", and "x accepts bitcoin" kind of news is actually fueling the believe. What we need is not one good news, but a series of favourable news one after another to develop confidence again.

I do not expect mass adoption to come quickly. Smartphone are common and cheap nowadays, but there are still people in the developed countries without smartphones. The public will have inertia switching to bitcoin. We will have to wait it out and enjoy being an early adoptor.

[danynx]

i think the news can be stacking, then they will explode at the same time and make bitcoin price to raise.

[romerun]

typically, news and price are unrelated, exception for really big news.

[Wary]

Funny how there is always a "bitcoin will go to moon when [X] happens".  There is a never ending string of these "when X happens, then moon" events, for years and years and years and years.  And once the X event does happen, then still no moon.  Then on to the next "oh well, X came and went and nothing, but lookout when Y happens!" event supposedly in the future.

Human nature: Never happy with the now, always looking for the "next thing" to be happy.

What if I say that the current price reflects ALL good news events priced in for the next 5 years?  Depressing? (not that I believe that, but just for sake of argument)

I would answer that they are priced in with probability of them happening. Say, an event A, if happens, would rise bitcoin price on $100. Chances of it's happening are 50:50. So only $50 are currently priced in. If the event happens when expected, the price will jump remaining $50; if it doesn't happen, the price will drop original $50.

EDIT. What's even more important: "everything is priced in" works only for an effective market. In particular, for the equilibrium to be achieved, market players must have enough capital to rise the price to "everything is included" level. While currently total capital of those who understand bitcoin's potential is orders of magnitude smaller than that. (That's why B&H worked so good so far).