Bitcoin as an investment

[soy]

The long term slow drop in Bitcoin value, is it the result of bad press foist by banks or the dumping of mined Bitcoins by large farms like those associated with KnC?

A long slow decline is bad for miner/investors like myself who don't dump the mined Bitcoins.  But, it would seem ideal for owners of large farms who see the decline as reducing the number of users getting into mining and therefore the reduction in private purchase of mining gear.

Historically, since KnC's gear came on the market, the best thing to have done with the mined Bitcoins is to have dumped the Bitcoins for cash.  Did they foresee the result of constantly dumping the Bitcoins?  Would the slow decline in value have happened anyway?  We know the banks don't object to Bitcoin become useless as an investment.

[1715115895]

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[MF Doom]

I dont think its the result of bad press.  Is the result of a fraudulent increase to over $1000 due to Gox/willie bot and other fraudulent exchange activity

[sniveling]

Bitcoin's always gone up and down in value. I think the price would have gone down after it peaked anyway. This is probably the despair phase and it's a good sign we are starting the run up to the next peak.

[RodeoX]

There is no reason to not to believe it is the correct price. Investing, aka. speculating, is a very risky game of trying to predict the future price. This ran the price up beyond $1000, far above it's value based on utility and current use. Then the price crashed and seems to like $350. Well, maybe we have our answer. The right price is about $350.
It will likely go up in the future if current trends persist, but that again is a guess and assumes a certain future. Bitcoin was never meant as a investment and it is risky to do so.

[soy]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

[PolarPoint]

Despite what others may think. We are not going to see another ATH in 2015. Bitcoin will climb up slowly in 2015 with ups and downs. If you have spare cash, buy some for long term investment.

[pinky]

The long term slow drop in Bitcoin value, is it the result of bad press foist by banks or the dumping of mined Bitcoins by large farms like those associated with KnC?

The main thing is there is less demand than one year ago which is typical for post bubble period. Then we have less press coverage, centralized mining which must sell to have positive ROI, unfavorable regulation & bans in some countries, regular auctions of seized coins, possible returning of gox coins, possible slow selling of stolen gox coins, merchant selling pressure. Bitcoin is fucked until we see something that will spur the price - new demand like accounts seizures, higher inflation, new great app,....

[soy]

So if we focus on the large farms continuing to dump their mined Bitcoins although there's no telling what their investors, those who buy slices of the farm, do with theirs, and figure that when they feel that their large farms are too-big-too-fail from new investments in Bitcoin miners,  perhaps they'll curtail their Bitcoin dumping and allow the price to rise.  If the small miner were to follow suit, say next year starting to sell each Bitcoin as it accumulates and recording the blockchain value of each payout for tax computations, then when the small miner sees a rising trend in Bitcoin price, he might buy back each Bitcoin as it approaches the value it sold at.  That would seem to be the safest way to play it.  Heck the average realtime blockchain value for the Bitcoins I mined this year is ~$569 while the Bitcoin value right now is ~$348.  So, the large farms are hurting Bitcoin on the scale of Karpeles.  It did level out the hashrate tho.

[the joint]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

Did you read the Satoshi white paper?

That is how BTC was presented.

[1Referee]

If you focus on the legit price of Bitcoin then current rate is an amazing achievement and the right price.

People are constantly mentioning Bitcoin was $900 $1000 bla bla bla. That was 100% manipulation thus not legit.

Of course miners and early adopters kept dumping at such prices. It would have been weird if they didn't dump.

[RodeoX]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

Did you read the Satoshi white paper?

That is how BTC was presented.

I didn't get that from the white paper? It does not mention investing or speculating on bitcoin. I'm certainly not saying you can't and many, many people have encouraged others to speculate. But I don't see where Satoshi has?

[sniveling]

Satoshi intended it as a store of value and you could speculate on any store of value like gold or dollars. I thought he created it as a store of value for when banks go bankrupt.

[the joint]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

Did you read the Satoshi white paper?

That is how BTC was presented.

I didn't get that from the white paper? It does not mention investing or speculating on bitcoin. I'm certainly not saying you can't and many, many people have encouraged others to speculate. But I don't see where Satoshi has?

Actually, I meant the opposite.  I meant that the white paper is how BTC was "presented," and it was presented as a framework for a decentralized monetary system, and not as an investment.

[sgbett]

Bitcoin isn't an investment, it's insurance.

[fewcoins]

Bitcoin isn't an investment, it's insurance.

Insurance?! LMFAO! It's actually a guarantee that your money will be moved around in a Ponzi scheme format and placed into someone else's pocket (usually mine)

[rogerdonkey]

Bitcoin isn't an investment, it's insurance.

insurance? are you kidding me?? what you mean with insurance???

[Ibian]

Bitcoin was never meant as...

People need to stop saying this.

[Ibian]

Bitcoin isn't an investment, it's insurance.

insurance? are you kidding me?? what you mean with insurance???

http://www.usdebtclock.org/

That's what he means. We will see hyperinflation, or default, or a massive war within our lifetimes. Bitcoin is independent of any of the fiat economies. It's digital gold.

[kingscrown]

imo its not an investment - just a curency

[exocytosis]

Bitcoin is independent of any of the fiat economies.

Oh, really?

Yet Bitcoin's value is measured in USD ... And merchants "accepting" bitcoin, actually doesn't accept Bitcoin at all, but USD through Bitpay and Coinbase ... Doesn't sound very independent to me.

If all the fiat economies of the world were to come crumbling down at the same time, would poor peasants in Africa and Asia all suddenly come flocking to Bitcoin? Or would they perhaps focus on getting food in their stomachs instead?

The Bitcoin hype started dying as soon as Gox went out of business and took Markus and Willy with it. Every BTC bubble was fueled by Gox manipulation schemes. Now the world is seeing bitcoin for what it really is: A couple of thousand deluded cultist hoarders, and another couple of thousand junkies and pervs looking for drugs and child porn on the deep web.

[fewcoins]

Bitcoin isn't an investment, it's insurance.

insurance? are you kidding me?? what you mean with insurance???

http://www.usdebtclock.org/

That's what he means. We will see hyperinflation, or default, or a massive war within our lifetimes. Bitcoin is independent of any of the fiat economies. It's digital gold.

LMFAO! Is that why it is getting hammered along with gold??? BTC is looking like a 0.0001 penny stock that keeps going to .0002 & back down again & again... it's sad, please don't compare it to gold, anything but a real asset that has almost always held value on this earth. Get that pump n dump propaganda the fuck out of here, we are in the dump phase

[TeeBone]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

Marketing lies, guy. That's all it is, one lie after another. 'digital gold' is another good one lmao. Litecoin too is 'digital silver' lmao. The bitscam pyramid is one for the history books.

[RodeoX]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

Marketing lies, guy. That's all it is, one lie after another. 'digital gold' is another good one lmao. Litecoin too is 'digital silver' lmao. The bitscam pyramid is one for the history books.

Marketing by who? I have never sold a bitcoin and could care less about what other people do. Bitcoin is my money and I use it almost daily now. Suit yourself, but it has been the best financial decision of the decade for me.

[ThatDGuy]

Bitcoin isn't an investment, it's insurance.

insurance? are you kidding me?? what you mean with insurance???

http://www.usdebtclock.org/

That's what he means. We will see hyperinflation, or default, or a massive war within our lifetimes. Bitcoin is independent of any of the fiat economies. It's digital gold.

LMFAO! Is that why it is getting hammered along with gold??? BTC is looking like a 0.0001 penny stock that keeps going to .0002 & back down again & again... it's sad, please don't compare it to gold, anything but a real asset that has almost always held value on this earth. Get that pump n dump propaganda the fuck out of here, we are in the dump phase

BTC shares quite a few qualities with gold, regardless of whether or not you choose to accept those factual similarities.  It also has advantages that differentiate it sufficiently to carve out its own place.

[soy]

I can't find mention of it on Wikipedia but in the not too distant past I think the Polish zloty banknotes were printed in Great Britain but Poland couldn't pay for the printing because the mint required payment in a hard currency.  I think it's something of the same idea when the manufacturers of Bitcoin mining equipment dump Bitcoins for immediate hard cash.

[NotLambchop]

Bitcoin was never meant as a investment and it is risky to do so.

The early hype was that since the number of Bitcoins that can exist won't change it will have better long term value than fiat.  This was after some years of savings accounts earning pennies per thousand dollars per year.  So, I'd say it was presented as an investment.

Marketing lies, guy. That's all it is, one lie after another. 'digital gold' is another good one lmao. Litecoin too is 'digital silver' lmao. The bitscam pyramid is one for the history books.

Marketing by who? ...

Every permabull chanting "BUY HODL EVERYTHING'S FINE"?

[RodeoX]

Bitcoin is independent of any of the fiat economies.

Oh, really?

Yet Bitcoin's value is measured in USD ... And merchants "accepting" bitcoin, actually doesn't accept Bitcoin at all, but USD through Bitpay and Coinbase ... Doesn't sound very independent to me.

If all the fiat economies of the world were to come crumbling down at the same time, would poor peasants in Africa and Asia all suddenly come flocking to Bitcoin? Or would they perhaps focus on getting food in their stomachs instead?

People in every country except America are saying "WTF are you talking about?" Dollars have no connection to bitcoin unless you have access to dollars, and most of the world does not.

The Bitcoin hype started dying as soon as Gox went out of business and took Markus and Willy with it. Every BTC bubble was fueled by Gox manipulation schemes. Now the world is seeing bitcoin for what it really is: A couple of thousand deluded cultist hoarders, and another couple of thousand junkies and pervs looking for drugs and child porn on the deep web.

Bitcoin has at least tripled in size since there was an Mt.Gox. Just in the last few days the second largest company in the world started using them. Huge players are arriving all the time. Now I can buy new cars, real estate, any kind of consumer item. You say there are a couple of thousand of us? BitPay (just one of many payment processors) has over 30K businesses that accept it. Coinbase has 37K.  Hell I've met thousands of bitcoin people myself at conferences and such. Wherever I travel around the world I spend my bitcoin and meet people who have embraced it. It is a world wide phenomena and growing exponentially.

[RodeoX]

give up, microsoft does not accept bitcoin, they accept USD from BIYPAY
yes, bitcoin is still not $0 today buy it's going to be there lower and lower as the passed history already showed us

I don't understand this argument. They take my bitcoin. I don't care what they do with them after I send them. In fact if they did not turn them back into fiat I would think they are making a mistake and abdicating their fiduciary responsibility.
I do not care about the price. I look at adoption. I use my bitcoin money and so I want places to spend them. These are stellar times! I can buy anything for bitcoin now, including microsoft products.

[Arv1e]

I do find most of the comments quite funny seriously lacking depth of thought.

Bitcoin is currently a speculative investment!

I invest in BTC because of the underlying technology and because it is a serious disrupter to traditional banking and transfer of wealth.

Assuming I am correct then BTC will increase in value over time and it has done rather well so far.

The $1000 bubble is normal and so is the market correction back to 300/400. If you look at the growth, from inception to today's spot value its impressive.

The value will go up when people see it as an "INVESTMENT" and they buy BTC with Fiat. Day to day some people are buying BTC to spend but this is currently a drop in the Ocean.

Let me share with you a little bit of reality to compare where BTC is today.

Apple started out in the 70's and is about 40 years old.

In that time they have grown from a silly little nerdy company (compared with Microsoft during the 80's) to a Company worth $630 BILLION

BTC is currently worth $5billion which is less than the amount of $100 dollar shares traded in Apple each day.

Bitcoin is in its infancy and subject to reacting violently to any market action but I will tell you VERY SIMPLY why BTC price will not keep dropping.

1 More and more people recognise the technology is sound and thus an excellent alternative to traditional currency

2 As the price drops it will become more and more attractive to investors and their very action to purchase will push the price back up.

Personally I would love to see it drop to around $250/$275 because the amount of money which could flood in could be enough for a lot of Russians and Chinese to transfer wealth from dollar too.. and that means BIG FAST RISE to $500.

Then next year the same bollox will be spouted in these forums again.. Then it will move up to $1000 and the next generation of people arriving at the forum will start spouting the same rubbish from the $1000 perspective when it drops to $800.

So remember guys.. BTC is in its infancy if it suddenly opens its mouth, saying  "Daddy" or just randomly farts the whole family will bang on about it for days!

As time moves forward Bitcoin will be exposed to growing pains until it matures OR fails.. I believe it is way past failure unless something happens in the underlying technology for everyone to lose faith.

It doesnt take much to lose faith.. In less than 2 years Russians have lost faith in their currency!

[Stargazer]

I like bitcoin and it's a good long term investment it's just not doing well at the moment. Internet became big and now it's time for the internet money
We will surely see bitcoin trade for $500+ again, but it may take months or even years.

[atlantic miner]

buy and hold Bitcoin is better for really long term investing

[MF Doom]

I like bitcoin and it's a good long term investment it's just not doing well at the moment. Internet became big and now it's time for the internet money
We will surely see bitcoin trade for $500+ again, but it may take months or even years.

It just as easily could go to $10 really.  Once it reaches "mass adoption" it could stabilize there.

[smalltimer]

Satoshi intended it as a store of value and you could speculate on any store of value like gold or dollars. I thought he created it as a store of value for when banks go bankrupt.

only problem: it is no store of value  with that inflation.
So all you say does make no sense at all.


Stop comparing btc to gold. You look like idiots doing so.

[Arv1e]

Satoshi intended it as a store of value and you could speculate on any store of value like gold or dollars. I thought he created it as a store of value for when banks go bankrupt.

only problem: it is no store of value  with that inflation.
So all you say does make no sense at all.


Stop comparing btc to gold. You look like idiots doing so.

Please explain this comment.

Gold is a finite resource Bitcoin is a finite resource (21M)

Gold is mined releasing more gold flowing into the market at a known rate. Bitcoin is the same

Golds value is arbituary and created purely by market forces. Bitcoin is the same.

If TOMORROW the whole world stopped buying Gold its value would be zero.

The only fundamental difference is gold is physical whereas BTC is digital but totally accountable.

SO, EXACTLY why is comparing BTC to goldf idiotic??

[NotLambchop]

...
Please explain this comment.

Gold is a finite resource Bitcoin is BTCeanie BTCabies are a finite resource (21M)

Gold is mined releasing more gold flowing into the market at a known rate. Bitcoin is the same BTCeanie BTCabies supply is no longer inflating by 10-15% a year.

Golds value is arbituary and created purely by market forces. Bitcoin is BTCeanie BTCabies are the same.

If TOMORROW the whole world stopped buying Gold its value would be zero.

The only fundamental difference is gold is physical whereas BTC is digital but totally accountable. BTCeanie BTCabies are also physical.  So totally same, no fundamental difference.

SO, EXACTLY why is comparing Bitcoin BTCeanie BTCabies to goldf idiotic??

FTFY

[smalltimer]

Satoshi intended it as a store of value and you could speculate on any store of value like gold or dollars. I thought he created it as a store of value for when banks go bankrupt.

only problem: it is no store of value  with that inflation.
So all you say does make no sense at all.


Stop comparing btc to gold. You look like idiots doing so.

Please explain this comment.

Gold is a finite resource Bitcoin is a finite resource (21M)

Gold is mined releasing more gold flowing into the market at a known rate. Bitcoin is the same

Golds value is arbituary and created purely by market forces. Bitcoin is the same.

If TOMORROW the whole world stopped buying Gold its value would be zero.

The only fundamental difference is gold is physical whereas BTC is digital but totally accountable.

SO, EXACTLY why is comparing BTC to goldf idiotic??

nope. A lot of BS in that comment too.
Gold is not finite by any means. It's just relatively scarce.
Bitcoin is the exact opposite: it's finite but not scarce.

"Gold is mined releasing more gold flowing into the market at a known rate. Bitcoin is the same"
what differes is the inflationrate. Gold: unknown - probably around 1% every year. Bitcoin: 10% , USD: 5%

So there is two or more false statements in two sentences.

Bitcoin has performed worse than the russian ruble this year. Would you compare the russian ruble to gold? Why not?

"Golds value is arbituary and created purely by market forces. Bitcoin is the same."
there are practical usecases for both apart from pure speculation.
Every good that's traded on the free market has a price determined by supply and demand. Nothing special about it.

So much shit in one comment is hard to wrap the head around.
Do you actually believe what you are writing there?

Pretty much all of that comment was pure BS and even false claims. Please stop commenting.

[ThatDGuy]

nope. A lot of BS in that comment too.
Gold is not finite by any means. It's just relatively scarce.
Bitcoin is the exact opposite: it's finite but not scarce.

...

It's odd that you call someone else out on "BS" when you don't even appear to have a firm grim on the meaning of economic scarcity yourself.

The limited quantities of gold were never able to keep up with demand.  That's why it's scarce.

Finite things are not endlessly abundant.  That is what creates scarcity.

You said yourself that Bitcoin is finite.  Demand for it is what means that it is, in fact, scarce. 

[jaredboice]

I have smalltimer on ignore.  But since you quoted him, I can humorously say exactly why he's on the ignore list.

With trolling like this: "____ is not finite by any means. It's just relatively scarce." 

What else is there to be said?? 

[ChuckBuck]

Bitcoin isn't an investment vehicle, period.

It's a payment technology, protocol, and most of all cryptocurrency.

If you're in it to make a quick buck, you're doing it wrong.

[Ibian]

Bitcoin isn't an investment vehicle, period.

Stove it. It is whatever people treat it as.

Said it before but apparently there are always new people who can't think for themselves. Bitcoin requires people who will invest in it, and that requires the possibility of making a buck. It's a speculators game all the way to the top. Only then will it become a proper currency.

[jjacob]

Bitcoin isn't an investment vehicle, period.

It's a payment technology, protocol, and most of all cryptocurrency.

If you're in it to make a quick buck, you're doing it wrong.

Bitcoin is what the majority of people treat it to be.
A majority of people seem to be buying bitcoins treating it as an investment.

[mmortal03]

Bitcoin isn't an investment, it's insurance.

People devote a percentage of their investment portfolios to cash, so this is all just semantics.

[soy]

I like the idea of limited availability.  There will never be enough Bitcoins that every living US college graduate could own one.

But the falling price as it relates to large farms dumping the mined coins leads me to consider that KnC has had the most efficient Bitcoin miners and prices those too high but sells to a relative's farm.  Tactically they'd dump BTC until their efficient farms are the only viable farms  (I'm discounting miners who get free electric as they're unlikely unless government supported) and less efficient large farms would shutdown.  A disturbing facet is that if they then allowed the price to rise the previously mothballed farms would fire up so they would keep the price at that low.  They'd be harvesting a large slice of the mined Bitcoins until the payout for a discovered block drops from 25 to 12½.

[soy]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

[the joint]

Bitcoin is independent of any of the fiat economies.

Oh, really?

Yet Bitcoin's value is measured in USD ... And merchants "accepting" bitcoin, actually doesn't accept Bitcoin at all, but USD through Bitpay and Coinbase ... Doesn't sound very independent to me.

If all the fiat economies of the world were to come crumbling down at the same time, would poor peasants in Africa and Asia all suddenly come flocking to Bitcoin? Or would they perhaps focus on getting food in their stomachs instead?

The Bitcoin hype started dying as soon as Gox went out of business and took Markus and Willy with it. Every BTC bubble was fueled by Gox manipulation schemes. Now the world is seeing bitcoin for what it really is: A couple of thousand deluded cultist hoarders, and another couple of thousand junkies and pervs looking for drugs and child porn on the deep web.

So why, then, are venture capitalists pouring hundreds of millions of dollars into infrastructure and business development?

[the joint]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

Do you actually expect a strong correlation between the prices of the ruble and BTC?

If you live in a country whose currency's value is in decline, do you think the smart thing to do is to...invest?  Investing is something you do when you have all your immediate needs met and you have the money to invest.

Moving from the ruble to Bitcoin is like jumping off a sinking ship onto an active volcano.  Why on Earth would somebody do such a thing when BTC is so volatile?  High volatility is expected in such a small market whose reach extends to a global scale.  It's perfectly reasonable to establish confidence in BTC's future while simultaneously making the decision that it's currently a risky investment.

[RodeoX]

Perhaps the speculators have discovered the price. Maybe it's $300?, that seems reasonable. 

[soy]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

Do you actually expect a strong correlation between the prices of the ruble and BTC?

One word answer: Cyprus.

[oda.krell]

The long term slow drop in Bitcoin value, is it the result of ...

It's probably a combination of things, really:

(1) Cyclical nature of markets. Biggest bull market ever -> pretty spectacular bear market only to be expected.

(2) Price outran fundamentals means that, eventually, price will be brought back to earth. Maybe too much even, so now fundamentals are starting to catch up with price, and eventually will probably outrun the price.

(3) Professionalization of the entire market: both trading and mining.

(3.1) Professionalization of trading mainly means: the ability to short, to scale, which wasn't really possible until this year.

(3.2) Professionalization of mining means, competing industrial scale actors taking easy profits by selling newly mined coins at a small reliable profit, as opposed to the classical miner who held in anticipation of a less sure but higher profit. Race to the (profit) bottom started as a result: once enough miners sell, it becomes rational for the other, previously "hodling" miners as well to sell.

(4) Growth of network is solid, but possibly not as strong as previously thought. Had enough discussions with Jorge Stolfi about this topic in the wall observer thread, so I don't really feel like arguing why I believe there is significant adoption slash network growth happening. However, I also do believe we saw a "dip" of sorts on several metrics (no. of tx, tx volume, to name two). Network is still growing, but at least over the last 1 and a half years, the rate of growth is arguably lower than in the previous 2 or so years.

(5) OTC transactions distorting price discovery / hiding buying pressure from the public market. This one is more speculative, but it's a point I have been making for now more than a year: there is (maybe by now: was) this naive notion that "big money" would buy into BTC large scale, as a way to secure their wealth in the coming crypto world. The problem is: even if that would be happening (I'll remain agnostic about this going or not), there was never any chance big money would "buy in" on the exchanges in a straight forward way. It would have been always preferable to bind large mining operation's output to you contractually, possibly even sell a portion of the acquired coins to depress market price. NB please: I'm not saying that "big money is buying OTC". I'm just pointing out that if this happens, it will present as lower buying pressure than if it would happen on-exchange.

(6) Mtgox. Enough said.

(7) Various stuff I forget now... ETF still not listed. Looming bear market in general. Correlation with gold price, which isn't doing so hot either lately.


If I only had to pick the three biggest reasons, I would say: market cycle + large scale shorting + professional short term profit mining.

[the joint]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

Do you actually expect a strong correlation between the prices of the ruble and BTC?

One word answer: Cyprus.

So?  What does that have to do with anything?  Do you think BTC was the best possible option for Cypriots while accounts were being confiscated?  Almost *any*thing else would have been better.

[NotLambchop]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

Do you actually expect a strong correlation between the prices of the ruble and BTC?

One word answer: Cyprus.

One word reply: NeoBee.

[soy]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

Do you actually expect a strong correlation between the prices of the ruble and BTC?

One word answer: Cyprus.

So?  What does that have to do with anything?  Do you think BTC was the best possible option for Cypriots while accounts were being confiscated?  Almost *any*thing else would have been better.

One of the early big spikes in Bitcoin value was when Russian money in Cyprus banks had been threatened.  I can't envision the Russian money completely trusting the Cyrpus banking system ever since but even after almost seeing reverse interest rates on savings (didn't the Swiss just do that?) they perhaps trust it more than Bitcoin.  (Hope Karpeles was looking in a mirror when he gave that finger.)

[the joint]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

That photo of Karpeles giving the world the finger while wearing a very expensive suit comes to mine.

Do you actually expect a strong correlation between the prices of the ruble and BTC?

One word answer: Cyprus.

So?  What does that have to do with anything?  Do you think BTC was the best possible option for Cypriots while accounts were being confiscated?  Almost *any*thing else would have been better.

One of the early big spikes in Bitcoin value was when Russian money in Cyprus banks had been threatened.  I can't envision the Russian money completely trusting the Cyrpus banking system ever since but even after almost seeing reverse interest rates on savings (didn't the Swiss just do that?) they perhaps trust it more than Bitcoin.  (Hope Karpeles was looking in a mirror when he gave that finger.)

I find it hard to believe that the "spikes" were the result of BTC being purchased on behalf of those whose money was directly threatened.  That occurred during a time when news events directly catalyzed market movements.  A couple years ago, you could day trade successfully just from reading headlines.

[ThatDGuy]

The long term slow drop in Bitcoin value, is it the result of ...

It's probably a combination of things, really:

(1) Cyclical nature of markets. Biggest bull market ever -> pretty spectacular bear market only to be expected.

(2) Price outran fundamentals means that, eventually, price will be brought back to earth. Maybe too much even, so now fundamentals are starting to catch up with price, and eventually will probably outrun the price.

(3) Professionalization of the entire market: both trading and mining.

(3.1) Professionalization of trading mainly means: the ability to short, to scale, which wasn't really possible until this year.

(3.2) Professionalization of mining means, competing industrial scale actors taking easy profits by selling newly mined coins at a small reliable profit, as opposed to the classical miner who held in anticipation of a less sure but higher profit. Race to the (profit) bottom started as a result: once enough miners sell, it becomes rational for the other, previously "hodling" miners as well to sell.

(4) Growth of network is solid, but possibly not as strong as previously thought. Had enough discussions with Jorge Stolfi about this topic in the wall observer thread, so I don't really feel like arguing why I believe there is significant adoption slash network growth happening. However, I also do believe we saw a "dip" of sorts on several metrics (no. of tx, tx volume, to name two). Network is still growing, but at least over the last 1 and a half years, the rate of growth is arguably lower than in the previous 2 or so years.

(5) OTC transactions distorting price discovery / hiding buying pressure from the public market. This one is more speculative, but it's a point I have been making for now more than a year: there is (maybe by now: was) this naive notion that "big money" would buy into BTC large scale, as a way to secure their wealth in the coming crypto world. The problem is: even if that would be happening (I'll remain agnostic about this going or not), there was never any chance big money would "buy in" on the exchanges in a straight forward way. It would have been always preferable to bind large mining operation's output to you contractually, possibly even sell a portion of the acquired coins to depress market price. NB please: I'm not saying that "big money is buying OTC". I'm just pointing out that if this happens, it will present as lower buying pressure than if it would happen on-exchange.

(6) Mtgox. Enough said.

(7) Various stuff I forget now... ETF still not listed. Looming bear market in general. Correlation with gold price, which isn't doing so hot either lately.


If I only had to pick the three biggest reasons, I would say: market cycle + large scale shorting + professional short term profit mining.

Covered lots of bases, really nice summary of a perspective of the current situation.

[ThatDGuy]

Huge marketplace and potential in that alone. Like it, or not.

You need to add another category though: "Douchebag crybaby gamblers that post anonymously on internet forums in an attempt to vent their rage from being douchebag crybaby gamblers."

Yeah, I'm talking about you. People like you make me want Bitcoin to fail.

Just ignore the trolls, they aren't worth the effort.

[mlferro]

Bitcoin isn't an investment vehicle, period.

It's a payment technology, protocol, and most of all cryptocurrency.

If you're in it to make a quick buck, you're doing it wrong.

Bitcoin is what the majority of people treat it to be.
A majority of people seem to be buying bitcoins treating it as an investment.

why not an investment?

you buy bitcoins today  $ 320.00
after about 20 (maybe 10 or less)  days worth $ 400.00

you sell and earn from just over 20%, in well under one month!
opens a loophole to make an investment, so why not do it

[NotLambchop]

...
why not an investment?

you buy bitcoins today  $ 320.00
after about 20 (maybe 10 or less)  days worth $ 400.00
...

Sounds like a plan.

[nauane]

...
why not an investment?

you buy bitcoins today  $ 320.00
after about 20 (maybe 10 or less)  days worth $ 400.00
...

Sounds like a plan.

truth! 
had thought of it the other day

[soy]

So, perhaps the price had reached its stable low and is rebounding a little.

The latest contact from those handling the MtGox debacle say they've contracted with a company to "recover" stolen Bitcoins.  How I wonder.  Steal them back perhaps?

[unent]

So, perhaps the price had reached its stable low and is rebounding a little.

The latest contact from those handling the MtGox debacle say they've contracted with a company to "recover" stolen Bitcoins.  How I wonder.  Steal them back perhaps?

Only if Mark Karples or one of his employees stole them.

[soy]

So, perhaps the price had reached its stable low and is rebounding a little.

The latest contact from those handling the MtGox debacle say they've contracted with a company to "recover" stolen Bitcoins.  How I wonder.  Steal them back perhaps?

Only if Mark Karples or one of his employees stole them.

Cold storage is simply an address assigned to a wallet that isn't connected to the internet.  The perp could have purchased a laptop, opened a wallet, transferred the stolen Bitcoins to an address of that wallet, saved the wallet to a thumbdrive, smashed the laptop with a hammer and tossed it in the Seine.

A record of the stolen Bitcoins getting to that cold storage wallet exists in the blockchain but those stolen Bitcoins can't be moved to any other address without bringing that address in the wallet.dat of the thumbdrive back onto the internet and getting it seen by the blockchain.

Any other stolen MtGox Bitcoins that aren't in cold storage would have been mixed into some existing online accounts that don't maintain a history of each and every fractional Bitcoin's history giving the holder the argument he can't tell which are which?  But it can be shown that X number of stolen Bitcoins did enter some account address.  If the mixed Bitcoins are held by a company holding Bitcoins for many users and not differentiating which are which the company claims it's not responsible and not to be held accountable for those stolen Bitcoins that it acquired?

Are there any other places the stolen Bitcoins can be?  I understand the double spending of Bitcoins on MtGox was only a small fraction of those stolen.

[unent]

So, perhaps the price had reached its stable low and is rebounding a little.

The latest contact from those handling the MtGox debacle say they've contracted with a company to "recover" stolen Bitcoins.  How I wonder.  Steal them back perhaps?

Only if Mark Karples or one of his employees stole them.

Cold storage is simply an address assigned to a wallet that isn't connected to the internet.  The perp could have purchased a laptop, opened a wallet, transferred the stolen Bitcoins to an address of that wallet, saved the wallet to a thumbdrive, smashed the laptop with a hammer and tossed it in the Seine.

A record of the stolen Bitcoins getting to that cold storage wallet exists in the blockchain but those stolen Bitcoins can't be moved to any other address without bringing that address in the wallet.dat of the thumbdrive back onto the internet and getting it seen by the blockchain.

Any other stolen MtGox Bitcoins that aren't in cold storage would have been mixed into some existing online accounts that don't maintain a history of each and every fractional Bitcoin's history giving the holder the argument he can't tell which are which?  But it can be shown that X number of stolen Bitcoins did enter some account address.  If the mixed Bitcoins are held by a company holding Bitcoins for many users and not differentiating which are which the company claims it's not responsible and not to be held accountable for those stolen Bitcoins that it acquired?

Are there any other places the stolen Bitcoins can be?  I understand the double spending of Bitcoins on MtGox was only a small fraction of those stolen.

I know Mark Karples "found" 200000 bitcoins down the back of the couch in an old wallet he had "forgotten" about. Maybe there are some stolen bitcoins hidden down the back of another couch.

[AlexGR]

The low Russian ruble and no cash flow into Bitcoin points to a very real loss of confidence in those who have defacto control and the idea itself. 

You could say the exact same thing for Gold and Silver... if Russians aren't buying it as a hedge to the ruble, then PMs are surely "finished". But we are not really factoring in market manipulation and perception management. For Bitcoin in particular, the idea is to have Bitcoin portrayed as the worst investment of the year in a large number of financial and mainstream articles.

[inca]

You could say the exact same thing for Gold and Silver... if Russians aren't buying it as a hedge to the ruble, then PMs are surely "finished". But we are not really factoring in market manipulation and perception management. For Bitcoin in particular, the idea is to have Bitcoin portrayed as the worst investment of the year in a large number of financial and mainstream articles.

Yep, and it will no doubt be effective to a degree. But next year bitcoin won't have to work very hard to put in very high YOY % gains. The cynical in me might even suggest this will be timed to correlate with the opening up in the US of bitcoin to further investment in products such as an ETF or a US based exchange!