Bitcoin Is Crashing (businessinsider.com)

An anonymous reader writes: Bitcoin is getting smashed. The cryptocurrency was down 18% to about $892 per coin as of 8:17 a.m. ET on Thursday. It is the biggest drop in two years. Earlier this week, on its first trading day of the new year, Bitcoin crossed above the $1,000 mark for the first time since 2013, but it has now tumbled below that level.

Comments

Previous article

[buchner.johannes]

https://news.slashdot.org/stor...
Probably a lot of people took the news of a 1000$ high as a chance to sell now?

Re:Previous article

[aaarrrgggh]

More like a pump and dump scheme I would guess.

Re:Previous article

[HornWumpus]

China is in a huge bubble, smart Chinese are desperate to get their capital out. Capital controls never work for long.

The 'ghost cities' in China are all owned by Chinese citizens, who traditionally love to own * real estate. In China a condo that has never been occupied is worth more that a condo that has (strange, but somewhat understandable as rents are nowhere close to mortgage payments). The average person with money in China is sitting on assets that are overvalued by a factor of at least 5. As more and more of them realize this, bitcoin pricing will become more volatile. The 'grey market international cash flow' share of bitcoin ownership (think of it as a flux though) is increasing vs the 'investor/speculator' shares.

* 70 year lease, own...

Maybe just profit taking?

[DigitalSorceress]

I really think that a lot of folks had just said "oh 1k maybe time to "cash in"...

I bet it rebounds and will go through some oscillations every time it crosses 1k until folks get used to the idea that it can go to /higher than 1k then it will creep up and probably take a dip at 1.5k and/or 2k

Re:Maybe just profit taking?

[AthanasiusKircher]

The ignorance of looking at a 24 hour 17% drop vs a 300% 12 month raise is astounding. I would think most people who understand financial markets would not be this ignorant to call this a "crash"

For someone accusing others of being "ignorant" of financial markets, you sure have a funny way of reporting statistics. You do realize that IF you had a 300% gain, then a 75% loss would completely erase it, right? When talking about percentage gains this large, it usually helps to talk in terms of actual numerical gains or at least how much of a loss you have COMPARED TO the gain (in real numbers).

According to the first search hit I found, a year ago Bitcoin was at around $432. Yesterday, that site reported it as $1135. That's a 162% gain, not 300%. As I write this, Bitcoin is around $950. That's is indeed somewhere around a 16-17% loss in 24 hours.

But, from a clearer perspective on how we relate those two percentages, the gain for the past year was about $700. The overnight loss is so far around $185. In other words, Bitcoin lost OVER A QUARTER OF ITS YEARLY GAIN OVERNIGHT.

Is it back where it was a year ago? No. But trying to pretend that this is a minimal loss by juxtaposing numbers like 300 and 17 is disingenuous at best.

Should "people who understand financial markets" be worried at such a turn of events? Probably not. Because people who understand financial markets know that Bitcoin is right now a really bizarre investment subject to the whims of "pump and dump" investors, and there's still a lot of value locked up in some early investors who could completely crash the market if they decided to jump ship.

So, anyone "who understands financial markets" probably expects Bitcoin to be this volatile -- probably even more so. Whether a person "who understands financial markets" would consider Bitcoin a sound investment is a different question.

Re:Bitcoin is always crashing.

[Maritz]

Number of instances of word "bitcoin" in your comment about a Bitcoin article: 0.

Bitcoin is dead

[vvaduva]

This is it...Bitoin is dead!! It's up 300% over the last 12 months but down 18% over the last 24 hours. It's fucked! Bitcoin is dead!! What idiots use this crap??

Don't you see what Potter's doing?

[elrous0]

He isn't selling, he's BUYING!

Re:Rebounding already

[MightyYar]

Wait, it's back at $950, so the comment is back in date.

Paper currency is too dull

[T.E.D.]

You know what traditional currency like the Dollar was really missing? All the excitement of the random wild value fluctuations inherent in a dot-com stock! I for one find it tedious and boring to walk up to the checkout line in a retailer or grocery store already knowing that I have sufficient funds to pay for my purchase. Yawn.

Re:Slashdot effect 2.0

[Mister Transistor]

Aaaand.... it's gone.

https://www.youtube.com/watch?...

Unstable "currency"

[davidwr]

A useful currency is stable for the time you hold it.

If you are a merchant that takes bitcoin but sells it for local currency by the end of the day, you need intra-day stability.

If you are holding it as a currency for days or weeks at a time, you need short-term stability.

If you are holding it as a currency for longer, you need medium- or long-term stability.

On the other hand, if you are buying it as an investment, like a stock, or as a speculative "investment" (aka "gambling") then in addition to a long-term upward trend, you want instability so you can benefit from dollar-cost averaging as you buy and "dollar cost averaging in reverse" - selling a fixed amount of BC every day - when you eventually sell.

Of course, if you are a day trader who depends on intra-day changes in value, you want short-term instability and either a knack for timing the market right or a dose of good luck to keep from coming out in the red that day.

Re:Up

[houstonbofh]

Almost like people have never seen speculative corrections before...

1st Million coins

[Holi]

As long as Satoshi still controls the first million bitcoins I fear it cannot be taken seriously as the creator has the power to single handily effect the market. No bank or government is going to back something where 1 individual has set themselves up with such disruptive power.

Inverse relationship to Yuan

[NotARealUser]

Welcome to currency trading. The reason your grandparents did not bet the farm on currency is because of the wild swings. Somebody gains big and somebody loses big here. These sort of swings in currency are exactly how George Soros made his fortunes. I do not think the current swing indicates good or bad days ahead for BitCoin. It only indicates that it is being used for huge profits by some.

Here is a little explanation of what just happened:
One of the biggest emerging Bitcoin markets is in China. China's Yuan has been weak and even a small percentage of investors moving their Yuan investments in and out of Bitcoin can cause the market to fluctuate greatly. China's Yuan is much bigger than Bitcoin, so relatively small waves in China really rock the boats in the Bitcoin world. There was a spike in Yuan value, and some investors assumed better days ahead for China and cashed out bitcoins for Yuan. As you can see from the current charts, investors now saw cheap Bitcoin and are buying those again.

Re:Don't buy bitcoin for an investment.

[lgw]

All investment is risk, but that's different from what people normally mean by gamble. Sure any investment bears risks such as global nuclear war, government/societal collapse, alien invasion, and so on, but the unexpected death of the investor is a higher risk than those sorts of things. Any investment is a risk somewhere on the scale between short-term US treasuries, and loaning money to a heroin addict, but that doesn't mean all risks are similar.

Also, volatility and risk are different things. At this point for BTC, I'd be much more concerned about its volatility than the risk it would go to 0, making it speculative regardless.