Trading Balance

[cloon]

wrote today a pogram which adds the number bought multiplied with theyr value and substracts sold Bitcoins multiplied with theyr value (last 330 days).
The result is something like the "intrinsic" Bitcoin balance in USD floating into Bitcoin markets of the last 330 days...
source: sierrachartfeed 0.5
I took the daily average and plotted to a graph it looks like this:

MtGox last 330 days
taded days on bottom axis (its not a time axis because there were days without trades)
axis on the left in USD


MtGox last ~150000 tades
bottom axis are trades
axis on the left in USD (log scale)


i will uptade the result of all USD markets together soon!
not in this balance is:
 - the orderbook
 - Buying and Selling of real (materalistic) values
 - etc.

share your mind

[damnek]

So the purple graph means that each datapoint on the x-axis is the net buying volume of one of the last 330 days on mtgox? That seems a bit odd to me as every point is positive and surely there have been days that there was more selling than buying? So I must be misunderstanding your charts..

[cloon]

Its like this:
I buy 1BTC for 5 USD you sell 1 BTC for 4 USD the bitcoin market has increased in value 1 USD.
Thats what i added, and subtracted the opposite.
Its like a graph of USD going into Bitcoin market through MtGox

[DeathAndTaxes]

Its like this:
I buy 1BTC for 5 USD you sell 1 BTC for 4 USD the bitcoin market has increased in value 1 USD.
Thats what i added, and subtracted the opposite.
Its like a graph of USD going into Bitcoin market through MtGox

If you buy 1BTC for 5 USD someone else is selling 1 BTC for 5 USD.

Nothing has changed to the balance.

Before trade
You: 0 USD & 1 BTC
Counterparty: 5 USD & 0 BTC
MtGox total:  5 USD & 1 BTC

After trade:
You: 5 USD & 0 BTC
Counterparty: 0 USD & 1 BTC
MtGox total:  5 USD & 1 BTC

taded days on bottom axis (its not a time axis because there were days without trades)

There were days in the last year where 0trades occurred on MtGox?  I find that hard to believe.

[damnek]

Its like this:
I buy 1BTC for 5 USD you sell 1 BTC for 4 USD the bitcoin market has increased in value 1 USD.
Thats what i added, and subtracted the opposite.
Its like a graph of USD going into Bitcoin market through MtGox

Still not getting it. Is the purple graph cumulative? If not, there must have been some days with negative value?

[Stephen Gornick]

taded days on bottom axis (its not a time axis because there were days without trades)

There were days in the last year where 0trades occurred on MtGox?  I find that hard to believe.

Yes, June 2011 following the hack, the exchange was closed for nearly a week.

[DeathAndTaxes]

Yes, June 2011 following the hack, the exchange was closed for nearly a week.

That wouldn't be in the last year.

[Spekulatius]

The scale to the left cannot be, it implies only 100.000 USD (10^5) have flown into the market. Our current market cap is 63.000.000 USD already! (Maybe I misunderstood you).

[genuise]

The scale to the left cannot be, it implies only 100.000 USD (10^5) have flown into the market. Our current market cap is 63.000.000 USD already! (Maybe I misunderstood you).

Can anybody, please, educate me how exactly this 63M market cap thing is calculated?

I am not sure I understand it. Please correct me if I am wrong,
but I think that the only direct method to measure USD volume obviously present on the market is
combining actuall USD volume from orderbooks from all USD exchanges currently set up on bids side.
So all bids (if we trust exchanges) represent USD actually in existence and visible.

All other means are pure magic. Or highly indirect and speculative.

If I am right than currently the whole USD/BTC market amounts only to something ~1M USD (not more).

source bitcoin-analytics.com allUSD composite orderbook volume.

[damnek]

market cap:

9.4mil * $6.7 ~= $63mil

it's just a technical term..

[genuise]

market cap:

9.4mil * $6.7 ~= $63mil

it's just a technical term..

9.4 mil ? what is it?

all btcoins in existence?
so 63 mil only virtual thing?

[notme]

market cap:

9.4mil * $6.7 ~= $63mil

it's just a technical term..

9.4 mil ? what is it?

all btcoins in existence?
so 63 mil only virtual thing?

Yes.  Just like market cap for stocks.  Nobody could really sell the entire market for that price unless they took 10 years to do it.

[Stephen Gornick]

market cap:

9.4mil * $6.7 ~= $63mil

it's just a technical term..

And it is a term that is also a misnomer as it refers to stocks.
 - http://en.wikipedia.org/wiki/Market_capitalization

I believe notional amount is the more correct term -- a quantity valued at the current spot rate, not the actual amount should that quantity need to be bought or sold on the market.
 - http://en.wikipedia.org/wiki/Notional_amount

But the term market cap is probably more familiar and it is close enough to mean the current price X quantity outstanding.

[DeathAndTaxes]

I hate the term market cap because it is completely wrong.

Notional Amount is accurate but intuitive.  I prefer the term money supply.   The Bitcoin money supply is currently ~9.3M BTC or ~$63M USD.

[genuise]

I hate the term market cap because it is completely wrong.

Notional Amount is accurate but intuitive.  I prefer the term money supply.   The Bitcoin money supply is currently ~9.3M BTC or ~$63M USD.

I would copletely agree with you.

But I am interested in understanding how consolidated orderbook volume can be useful for market analyses.
What other similiar indices usually are used and can be adequate for illiquid markets of bitcoin?

[nimnul]

See http://wiki.tradingphysics.com/Historical-Consolidated-Order-Book-Data.ashx for example. Consolidated order book, well, consolidates data from many exchanges to make an inter-exchange order book so in case of BTC mtgoxUSD domination is not a problem as all USD exchanges are exposed in a USD consolidated book.

As for EUR vs USD I think there's no way to consolidate the books. How do I convert USD to EUR? Exchange rates depend on too many things - bank, volume, country. It's possible to use ecb.int or other similar data source for rates, but it is not usually possible to actually convert currencies at those rates.

[niko]

Its like this:
I buy 1BTC for 5 USD you sell 1 BTC for 4 USD the bitcoin market has increased in value 1 USD.
Thats what i added, and subtracted the opposite.
Its like a graph of USD going into Bitcoin market through MtGox

If you buy 1BTC for 5 USD someone else is selling 1 BTC for 5 USD.

Nothing has changed to the balance.

Before trade
You: 0 USD & 1 BTC
Counterparty: 5 USD & 0 BTC
MtGox total:  5 USD & 1 BTC

After trade:
You: 5 USD & 0 BTC
Counterparty: 0 USD & 1 BTC
MtGox total:  5 USD & 1 BTC

This is true. Cloon, would you please try and explain again with this in mind? Also,shouldn't you account for btc being generated every day?

[cloon]

move to off-topic pls!

I'll do the hole thing different