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Poll
Question: In the possible reasons listed, which do you think is true?
Bitcoin is actually used in daily transactions, pinned to real-world commodities, therefore more or less anchored already. - 12 (8.8%)
The interest rate system introduced by Bitcoinica provides a negative feedback loop. - 8 (5.9%)
Early adoptors and hoarders are manipulating the price to maintain a stablility illusion. - 20 (14.7%)
People are becoming less fanatic towards both rallies and dips. - 25 (18.4%)
It just happens, as a coincidence lasting for months, no more. - 8 (5.9%)
Several reasons here are true. - 32 (23.5%)
None of the reasons here is true. - 7 (5.1%)
There are more speculators. Their bets neutralize each other. - 24 (17.6%)
Total Voters: 135

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Author Topic: Why is the price so stable?  (Read 3639 times)
friedcat
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April 30, 2012, 05:27:02 AM
 #1

More options could be added if you provide them. Grin

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April 30, 2012, 05:37:24 AM
 #2

There are more speculators (their bets neutralize each other).

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friedcat
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April 30, 2012, 05:43:17 AM
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There are more speculators (their bets neutralize each other).

Added. Smiley

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April 30, 2012, 05:47:56 AM
 #4

it's very simple. there are always cycles of high and low volatility. now we are in low volatility. soon we will see a massive move

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friedcat
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April 30, 2012, 05:51:03 AM
 #5

it's very simple. there are always cycles of high and low volatility. now we are in low volatility. soon we will see a massive move

Of course.

But the fact that the low volatility lasted for so long is beyond my expectation and amuses me. So I opened this poll.

miscreanity
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April 30, 2012, 06:05:23 AM
 #6

There's almost never just one thing: multiple dynamics are in play.

Growth in adoption vs. base unit inflation; speculation and hedging forming pricing channels; developing derivatives mechanisms allowing for tighter speculative/hedging movement; time-based lending and investment slowing the volatility oscillations; expanding asset pools that haven't been motivated into being deployed; global markets are relatively calm right now, reducing their effects on smaller markets; newer business models being made possible... the list goes on.

I think the biggest factor is influence from traditional global markets, and those will probably erupt very soon. That would cause significant volatility in Bitcoin.
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April 30, 2012, 06:13:21 AM
 #7

the goal of the market has always been to find the true price of bitcoin.

the first year was pure maddens cuz bitcoin was manipulated into a huge bubble and then huge crash.

Now the playing filed is more even, and its getting more and more even. early adopters are securing at least SOME of their well earned bitcoin wealth in things like gold or something, late comers are building up bitcoin wealth, and all the while both early adopter and new comer are simulating the bitcoin economy more and more

end result: 5$ holds.... until it breaks! Up is the only option its only a matter of time but I'm talking years, but once we really do break out of 5$ it will be because bitcoin has hit a new "critical mass level" and over night bitcoin will go from 0.001% of world wide spending to 10%! bubble #2 will almost hit 1 millions dollars/BTC and then crash to the 100 thousands range.

in 5 - 15 years we will be saying "OK, We have 10% of world wide spending and growing, bitcoin is rated  AAA investment... so why the fuck isn't EVERYONE using bitcoin" and the answer will be "Can't teach an old dog new ticks, these things take time"

do you like my prediction?  Grin lol i have a dream, a fucking good dream!

making this dream a reality is fucking easy, spend bitcoin.... the more bitcion you spend at small ma & pa shops the more distributed the wealth is, the more distributed the wealth is, the higher the price. its that simple people, just keep dreaming  Cheesy


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April 30, 2012, 06:59:50 AM
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it's very simple. there are always cycles of high and low volatility. now we are in low volatility. soon we will see a massive move

so, we are all waiting for the most expected bubble in history of bubbles ?
Smiley
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April 30, 2012, 10:20:08 AM
 #9

Does this look like something stable, to you?



 - http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2012-04-01zeg2012-05-01ztgSzm1g10zm2g25

That 30 day chart of April shows more than an 18% swing, high to low, in April.

friedcat
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April 30, 2012, 10:36:52 AM
 #10

Does this look like something stable, to you?



 - http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2012-04-01zeg2012-05-01ztgSzm1g10zm2g25

That 30 day chart of April shows more than an 18% swing, high to low, in April.




The gold price has a 4.46% swing high to low this month. And the market cap of gold is many magnitudes larger than that of Bitcoin. 18% swing is almost a miracle with respect to such a small economy.

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April 30, 2012, 11:51:18 AM
 #11

My first guess is bots with a relatively conservative policy flatten the peaks.
Another bane is all bids are highly speculative whilst the asks reflect the costs of mining.

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April 30, 2012, 01:19:22 PM
 #12

The answer is obvious enough - (1) Bitcoinica and (2) more mature traders.  

Regarding (1), Bitcoinica's dampening effect took some time to set in, and the road here was bumpy as kinks were worked out, but I think, as many people predicted, leveraged trading through bitcoinica has effectively killed the extremely volatile bitcoin of the past; and it's unlikely, as long as something like Bitcoinica is around, it will ever return.  Bitcoin has grown up, and the days of "the rocket" are over.  I'm sure the price will increase, but I'm also confident it will be over a period of many, many years now.  It's doubtful the price will reach and exceed the all-time high for several years.  Even still, I think in the next two years we'll see $10 bitcoins again and that's still a fantastic return.

With respect to  (2), I think there are more professional and mature traders involved in bitcoin now and I think they're interested in and willing to accept lower profits than the crazy windfalls us early adopters went after.  When I started over a year ago I was expecting to and luckily ended up getting returns on my investment of hundreds of percent in a matter of a few weeks.  It was truly insane.  Now, I'll go after %5 or even less over, say, a few days or weeks and consider myself very lucky if I can manage that.  There are more people cashing out as soon as they're the slightest bit profitable.  This goes both ways, of course, and I think works in conjunction with (1).

So, there you have it.  If you want to make a lot of money fast, you'd probably be better off shorting/buying AAPL than playing with bitcoin.
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April 30, 2012, 04:06:48 PM
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April 30, 2012, 09:41:49 PM
 #14

Every day I wonder why the price has been so stable.  I have to step out of my micro view of the Bitcoin world and look at things on a macro scale.  The "gold" rush is over.  There was a time when we were seeing MASS influx of random new people, buying up 50 video cards at a time at Fry's, Best Buy, Microcenter, etc and watching the price skyrocket.  Those days are over.  All the people who are not serious about Bitcoin have left.  It is only the hardcore nerds that are left.  We may have another boom, but this seems to be a time to rest.  I'm basically explaining the charts that everyone posts though, just like the post above me.
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April 30, 2012, 10:03:17 PM
 #15

Its not stable its in equilibrium..  The amount of new fiat coming into the system is about the same as new BTC is being added to the system via Miners.

Once the block reward halves and hopefully by then the popularity of BTC has increased (ie more fiat into the system), the price should start rising rapidly.
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May 01, 2012, 01:24:10 AM
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It's a lot of reasons, but I think the biggest reason is that miners are willing to bring their product to market too cheaply. They can't be making much over cost.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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May 01, 2012, 02:06:13 AM
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It's a lot of reasons, but I think the biggest reason is that miners are willing to bring their product to market too cheaply. They can't be making much over cost.

If I sell everything I mine per day, I'm looking at 60% over electrical costs, not too shabby.

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May 01, 2012, 02:11:52 AM
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It's a lot of reasons, but I think the biggest reason is that miners are willing to bring their product to market too cheaply. They can't be making much over cost.

If I sell everything I mine per day, I'm looking at 60% over electrical costs, not too shabby.
Does that take into account your capital investment and maintenance, among other costs?

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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May 01, 2012, 02:18:01 AM
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It's a lot of reasons, but I think the biggest reason is that miners are willing to bring their product to market too cheaply. They can't be making much over cost.

If I sell everything I mine per day, I'm looking at 60% over electrical costs, not too shabby.
Does that take into account your capital investment and maintenance, among other costs?

darlatino999 said electrical costs... so no.

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May 01, 2012, 02:21:44 AM
 #20

FYI, Bitcoinica introduced interest system in mid-Feb.

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