Oh it's far from over...

[Stratobitz]

Today, those involved in the crypto-community have once again been met with a flurry of news and speculation over the current and future price potential of Bitcoin in 2015 and beyond. We've been here before, and more than once. Where is Bitcoin headed? Where is the floor? Has it bottomed?

Closing out 2014, we all found ourselves sitting by our Christmas trees, staring at the Bitcoin charts bouncing along from the 400s, to the mid 300s, to the low 300s - and all the while I can't but help remember how earlier in the year; so many of us here were still adjusting to the collapse of Bitcoin's highs near $1200 USD, the fallout of MtGox, the collapse of Silk Road and countless negative news stories surrounding Bitcoin and the people who used them.

Then we were all faced with the Alt Coin pump and dump season, where countless coins, pools, and exchanges all participated in a huge and unquestionably calculated plan of defrauding 1000s of cryptocurrency investors out of an uncountable amount of BTC/Fiat Currency.  Coins we're created nearly every day; listed on "reputable" exchanges; and then it was proved the coins were pre-mined, a scam from the start, a giant setup - all to get your BTC.  

Now, while many of us are even still adjusting and rebuilding from losses we incurred - I look at the price of Bitcoin and think to myself - it can very well, and most likely will, go much lower.

The truth is:

- There are people, companies, even governments out there, that hold and control large quantities of Bitcoin. Those large stakeholders could at any given moment; for reasons too numerous to count, decide it is now time to exit, and crash the price into the double digits.

- The big banks, credit card processors, American Express, Visa, MasterCard, hate- I'm sorry-- HATE- the concept of Bitcoin. They hate the idea of transparency. They are in no way fans of "low to no transaction fees". Big Banks work off the fractional reserve banking system. This is how they stay in business. They literally make money simply by typing numbers into a computer, and with Bitcoin- that will never be possible. These institutions control the money supply. And large companies MUST maintain strong and positive relationships with them, because without them they would cease to operate.

- Those large financial institutions could buy out Bitcoin in a heartbeat. A billion dollars is nothing to a company like Visa. And these companies, make no mistake, have teams in place dedicated to see that Bitcoin does not succeed. Lobbyists have been hired, think tanks assembled, and these guns for hire spin disinformation, dig for the worst news stories, and preach that Bitcoin is nothing more than a method for criminals to buy drugs, launder money, or hire hitmen; which 99.99% of the population find simply frightening.

- The huge drop off today was caused by a rather small drop in the bucket "total coin supply" wise. It doesn't take much big picture wise to drive the price of the entire BTC market down 20% - and for this reason, even big merchants who have been pioneers - companies like Dell, Overstock and Gyft, will never "hold" on to their bitcoin revenue. These companies work in industries where profit margins are razor thin. Amazon - which may very well at some point begin to accept Bitcoin, operates on a profit margin not more than 1-2%. They will never "hold" their coins. They can't. Their margins, nor will their bankers, allow it. This means spending bitcoin at a retailer really means selling to the exchange. And selling to the exchange means driving the price down.

While $293 may seem like a great price to pick up some Bitcoin - and it may turn out to very well be; the truth I think is that it should be viewed as nothing more than a short play. Will Bitcoin head north above $300 again? I think it's likely. But I think the long term outlook, 6 months, 1 year, 2 years, and so forth is going to see major price swings and likely much lower price points.

In April of 2014 everyone was saying the next big run up would be the end of 2014- leading up to the holiday season. How wrong were we. Bitcoin has in very many ways acted like nothing more than a vacuum for fiat money where people who wan't to chase gains, get in on the action, and get rich quick become the dirt it sucks up and spits right out.

My opinion; and call me crazy - is that Bitcoin will at some point or another see $100. A bitcoin is divisible into 100,000,000 units - and $100.00 USD just seems to fit nicely.

Perhaps one day we can add a zero to that number and $1000.00 bitcoin prices will become a reality. I am still to this day a believer in cryptos. I truly believe that the future will see see wide adoption of crypto and virtual currency technologies. But I've learned quite a bit in this last 15 months of being involved in this world.

If Bitcoin can go from $1200 to $293... there is no reason to think that it can't also go from $293 to $75.

2015 will be quite a year either way.

Strato

Post Script: For those that would like the truth about the floor, the bottom, the actual real honest to God number to which a bitcoin might fall too, that number is zero. We'd all like to say impossible. But I'd hope we all agree that we'll never really know what's around the corner. Technology... here today- gone the next.

[podyx]

[megadeth]

despair thread +=1

[Stratobitz]

despair thread +=1

Not despair... just open to realistic possibilities.

Which isn't necessarily a bad thing.

Strato

[jubalix]

Fractional reserve banking is ok per se as it provided a way to use capital and production, as long as your allowed to do it as well, eg be a bank. Otherwise banks tend to abuse position, which has happened. Banks/Govs have abused their monopoly position. This is where BTC comes in.


Banks nor gov's can buy out BTC. All they can do is increase the price to. That is one of the issues they face its t he first thing they can't buy it out. This is a new concept for them.

[ParabellumLite]

despair thread +=1

Not despair... just open to realistic possibilities.

Which isn't necessarily a bad thing.

Strato

A touch of realism is very much needed here. Thanks for this topic, Strato.

[ElGabo]

And who will mine the coins for 75$?

[LOBSTER]

And who will mine the coins for 75$?

Nobody. This would mean the collapse of the Bitcoin, transactions would stay in queue for hours / days.

[ajw7989]

This new btc price below 300 is sad indeed. I got into bitcoin when it was double digits but do not want to play with it if it reaches that low. Bitcoin needs positive news and companies getting involved is not really a huge price incr but the opposite since none actually hold it. We needs companies which will hold and believe in btc to hold it.

[ElGabo]

And who will mine the coins for 75$?

Nobody. This would mean the collapse of the Bitcoin, transactions would stay in queue for hours / days.

Yep, sure.

But I think it won't come....

[solitude]

op good post.

A well-written, thought provoking piece.  First I've seen on this forum in months.

I'm surprised there's no shilling involved: no website links, no whoring out your signature space, no faggotry.

The idiots who bought when the mainstream media liars and deceivers had something to write about in late 2013 have probably gotten out by now.  Good riddance, I say.

Trolls gonna troll, shills gonna shill, and fudsters gonna fud, but I'll never sell.

[Stratobitz]

Fractional reserve banking is ok per se as it provided a way to use capital and production, as long as your allowed to do it as well, eg be a bank. Otherwise banks tend to abuse position, which has happened. Banks/Govs have abused their monopoly position. This is where BTC comes in.


Banks nor gov's can buy out BTC. All they can do is increase the price to. That is one of the issues they face its t he first thing they can't buy it out. This is a new concept for them.

Well fractional reserve banking has wreaked havoc history wise... Hence the term Run on the Bank. If everyone who banked at "Whatever" Bank, Bank of America, Wells Fargo, SunTrust - if all their "depositing customers" walked in and said I'd like to close my account and have my money, I think most people would be surprised to find out that the bank actually doesn't have the money. Their money goes into the bank's fractional reserve requirement account (15% I believe in the US); and then the bank simply enters fictitious money into their computer which it then lends out in ways of mortgages, credit cards, etc.

Not to beat a dead horse, but I think most people are completely unaware of how the US, EU, CA, and most modern banking systems work. That most of the money simply is made up out of thin air whenever the bank has an opportunity and finds the risk acceptable to lend it out. And these banks really are the devil and an angel in one. I run and own a business. We do a few million gross per year. And in looking back, the times when business was tight, money supply low, cash flow down - were the times when I could never get credit extended or approved. But during the times of gangbusters, I've literally had bankers come to my business to meet me to, not joking here, give me money... operational cash flow account line of credit. But that's only when I didn't need the money. Knock on wood I'm still in business and the lights are still on. (As are my miners).

Back to Bitcoin. Agreed they would find it hard to buy up the entire supply. Impossible. But they could easilly create absolute chaos in the marketplace and exchanges. The market cap of Bitcoin is so small. I mean, hey Zuckerberg is personally worth what 5 times the value of all Bitcoins... It's really not that big of a currency pool. These banks could simply buy up as retailers dump - which they will - they have to... and then flash crash... rinse repeat.

To them the losses would be nothing, chump change so to speak. And this tactic would make the bitcoin markets toxic to any sane investor. People would flock.

Scary thoughts is all I am saying. I just think we all need to remember that that as groundbreaking as Bitcoin is... and how new technology is in fact disruptive and can change the world we live in... that the global banking system has real and absolute power. Businesses rely on that system for loans, merchant services, expansion. Consumers rely on that system for every aspect in which they use money. Mortgages, car loans, ATM withdrawals, security.

Bitcoin is, and will be for as far as I can tell, the very, very little fish in the very, very big pond.

Strato

[lolikop]

when price drops all i see is panic posts, when price rises i see pictures of space ships, its just human nature, please just stop talking and lets see what happens

[bitcon]

when price drops all i see is panic posts, when price rises i see pictures of space ships, its just human nature, please just stop talking and lets see what happens

[minerpumpkin]

Could go further, sure... The thing is: People are pretty willing to pay current prices, and they are even more willing and likely to buy coins at $100 or even double-digits. Those really are cheap coins! And I guess a lot of people have money sitting somewhere, ready to buy exactly those coins!

[CoinRocka]

Double bottom at 275.  There she is.

[minerpumpkin]

Double bottom at 275.  There she is.

Volume too low in my books. Maybe if we see another retest and a strong rebound, but I don't buy this one. I think we are going to break below it, still. Not beautiful, but necessary I guess.

[lolikop]

when price drops all i see is panic posts, when price rises i see pictures of space ships, its just human nature, please just stop talking and lets see what happens

i see devil horns in your post are you the devil?

[Q7]

The truth is:


My opinion; and call me crazy - is that Bitcoin will at some point or another see $100. A bitcoin is divisible into 100,000,000 units - and $100.00 USD just seems to fit nicely.

Seriously I would rather see bitcoin drop to the level where it will find equilibrium where there is little chance for fear or anything. What we need is confidence and when you have price moving down and then up again and then crash the next day, people would start to perceive bitcoin as something unsafe. Rather than projecting it as instrument for investment, we need to have it seen as a currency.

[BTCtrader71]

they would find it hard to buy up the entire supply. Impossible. But they could easilly create absolute chaos in the marketplace and exchanges. The market cap of Bitcoin is so small. I mean, hey Zuckerberg is personally worth what 5 times the value of all Bitcoins... It's really not that big of a currency pool. These banks could simply buy up as retailers dump - which they will - they have to... and then flash crash... rinse repeat.

To them the losses would be nothing, chump change so to speak. And this tactic would make the bitcoin markets toxic to any sane investor. People would flock.

It is prudent to consider what you are saying. But, how do you respond to this counterargument: Sure, fluctuating prices will scare away investors; but fluctuating prices won't kill bitcoin. Merchants are shielded from price fluctuations by converting straight to USD. Merchants will continue to adopt bitcoin because 1) it's easy 2) they get their USD faster 3) they save on credit card fees. Once they have 1-2 years experience and feel more comfy with bitcoin, they will begin to provide consumer incentives in one form or another. That's when consumer adoption will occur. And consumers can be protected from price fluctuations by converting their USD to BTC at the time of purchase.

Summary: Price fluctuations may be scary as shit to an investor, but price fluctuations won't kill bitcoin as a payment system.