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Bitcoin Nears $17,000 After Climbing About $4,000 in Less Than a Day
As economists attempt to make sense of Bitcoin, the cryptocurrency rocketed above $17,000 for the first time moments ago, adding about $4,000 to its price in fewer than 24 hours. Security reporter Brian Krebs tweeted on Thursday, "Closing in on $17k per bitcoin now (mind you, it was almost at $16k less than an hour ago. This is totally fine." Late Wednesday, finance author Ben Carlson wrote: Bitcoin has achieved something I've always wanted to see in the stock mkt - a reverse 1987 (20% gain in a single day)
"Rational"? Really? I do not think it means what you think it means.
This is going to crash hard, and probably fairly soon, and people will react with "We could not have foreseen this at all!"
And I will be over here, laughing at them.
Mr. Hu is not a ninja.
This is excellent to see! Now when it crashes out in the near future it will affect even more people, and it will be even more painful! This is exactly the kind of lesson that people need to experience to truly learn about the danger of speculative bubbles! They'll be better off for it.
In 3...2...1. Then, watch the currency go into free fall.
will doop when some trys to cash out a big chunk also even just 1 coin will trigger lot's of IRS paper work.
Ah, the old Cliffhanger game.
I'm buying popcorn stocks. Everybody's going to want to grab some when Bitcoin crashes.
As the increase is exponential, the moment I am going in is now. Just put all my belongings into it as well as maxed out my cards and took several loans. This is my ticked to become rich.
With my calculations it will reach 150.000USD in two weeks. There is no way I can lose money. Right?
Don't fight for your country, if your country does not fight for you.
it seems the expense of transactions is making them useless for their actual purpose. for the hundredth time I'm declaring that the end is nigh :)
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Yes, but at least if you bought tulip bulbs, you could point to them and say "Those are indeed tulip bulbs. They are physical. They exist. They're right there."
Mr. Hu is not a ninja.
How does one go about cashing in a bitcoin to collect said $17,000?
Someone gives you their wallet address. You transfer your bitcoin to that address, and they transfer the $17000 back to you.
Usually, this is done with an exchange as middle man, but the principle stays the same.
Late Wednesday, finance author Ben Carlson wrote:
Bitcoin has achieved something I've always wanted to see in the stock mkt - a reverse 1987 (20% gain in a single day)
Whoever wrote that is an idiot. No we do not want to see that kind of volatility in the market, positive or negative. That is NOT a good thing. Any time something skyrockets that fast in price it is pretty much invariably because something weapons grade irrational and/or criminal is going on. This is what happens with pump and dump schemes and those rarely end happily.
My mining profits were stolen, and all I have left is an electric bill and worn out GPUs.
I guess my question is this...how much of the increase is driven by people trying to throw money at anything that will get them a huge return? Or, when do financial advisors start recommending Bitcoin futures for Grandma's lump-sum pension payment?
I can't see this ending well because all it is is a speculative bubble. There's real money tied up in it, that's for sure, but in the end you don't even own stock in a company or a valuable commodity. All the cheerleaders are saying that the stock market is a casino anyway, but even if the market drops 30%, you still own stock. If Bitcoin drops 30%, you'll have to hope that it comes back so you can get your money out. Since it's not really based on anything, it's purely driven by having enough people pouring money in to keep the price high.
You have to use an exchange like Coinbank or Bitfinex, they'll take your bitcoins and offer you whatever other currency. Thing is that these exchanges often have restrictions on when, how often, and how much you can exchange, often they have queues that you have to wait in to actually exchange your currency. If you're a new user, you can usually expect to wait a while to drop your bitcoin for some other currency, and you can usually expect to have a limit on the amount you're allowed to convert. The exchanges do this to help prevent a crash via a flash selloff, and to some extent it's successful, however eventually consumer faith in the future of the value on Bitcoin is going to drop off (I mean really, $17k?) and when that happens those same protections are going to make the crash all that much worse for people involved.
Personally I'd rather have my idiots at home glued to the TV than out doing idiotic things
You sell it on a BTC exchange for USD or EUR and then send the proceeds to a bank.
With the inordinately low volume of bitcoin and its inherent instability, I can't see it gaining a foothold anywhere significant. Its value is fluctuating so widely, any major business would be crazy to accept it now. How are you supposed to budget and forecast against a currency that fluctuated 65% in a week?
To big businesses, it might as well be monopoly money. Trying to work that against cost of goods sold, operating expenses, etc is in now way worth the effort.
*insert gif of MJ eating popcorn*
If you gave me a choice between a printer and a giraffe with explosive diarrhoea, i'll get my ladder and my raincoat
Sell NOW!!! It's useless as currency at this price with high transaction fees. This bubble is going to pop hard and fast and probably before Christmas.
This is really concerning. The https://www.identitypi.com/ team thinks that this cryptocurrency will crash as fast at it rises.
Capital gains taxes aren't that complicated.....
(sale value - (purchase value + trading fees)) * tax rate.
Places like coinbase.comallow you to do just this.
Which is not how the tulip bubble happened. You couldn't point at anything, as what bubbled was a poorly regulated tulip futures market.
Tulip mania had more in common with the 2008 mortgage crisis that with Bitcoin.
Comment removed based on user account deletion
just wait for that IRS audit
Its funny because actual stock exchanges pay some traders to trade in segments to ensure liquidity.
Those who cannot remember the past are condemned to repeat it. -- George Santayana
I can't speak about amounts that large, but, I've purchased a few amazon gift cards (varying amounts $50-$100) using xmr.to (I mined monero for a bit just because) and a service like gyft. Which I've then used to buy tangible things. Of course that's not cashing thousands of dollars worth of BTC out directly into your checking account.
In my dreams it's worse. He's singing in Dutch, there.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Economists don't need to "make sense" of it, they are perfectly familiar with asset bubbles.
Last I checked it was over 19,000 dollars. Come on now guys.
E Proelio Veritas.
(title) - we've been here before.
Awesome replies from folks. Having not mined bitcoin but having a basic understanding of it, isn't it cost prohibitive to mine coin on your own devices? Won't the cost of electricity for these devices be higher than the actual amount mined? I thought I read where it's taking longer and longer to mine.
Fat, drunk, and stupid is no way to go through life, son.
Bitcoin is a recipe for epic financial disaster.
Nice try at affiliate marketing, but nobody here is that gullible.
Future headline: Pop!
Debate is a form of harassment. Do not question my truth.
Any Bitcoin exchange that's still running. Once the crash starts, they will likely shut down very quickly - because they would have to buy BTC that will be worthless by the time they can move it.
The paperwork will include explaining what all your other proceeds were when IRS demands records from the exchange.
... and after the rise you can cashout of BitCoin and invest in tulip bulbs....
Where the IRS smells money they will come after you. All they need to do is require the exchanges to report all accounts with proceeds in excess of ~$10k for the last n years, and they will send you a bill for everything you sold. (They don't deduct the cost of the bitcoins in that bill.)
It is a very stressful letter to get. Got one back in 2003 and it scared the living shit out of me.
Why ? Bitcoin is not a stock, and the Bitcoin exchanges don't function like stock markets.
If you are buying bitcoin hoping it will appreciate in value relative to the dollar then it is a secondary market and as such it functions almost identically to a stock market as a practical matter. Bitcoin is just an asset like gold or beenie babies or pork bellies or frozen concentrated orange juice. Any discussion about the "value" of bitcoin is by definition in relation to how many dollars you can get for it which is no different than asking what the current price of a stock is in dollars. Stocks are assets and so is bitcoin.
Economists don't need to "make sense" of it, they are perfectly familiar with asset bubbles
And their perfect familiarity brings with it perfect understanding that by definition asset bubbles don't "make sense." Sometimes wry humor just doesn't work in writing.
Bitcoin exchanges don't buy BTC. They just facilitate trade between two parties. One brings the BTC, the other brings the USD, agree on a price, and the exchange swaps their assets around.
No there isn't. Businesses mostly use payment gateways that sell the BTC immediately. There's no risk of price fluctuation to the business.
"Immediately" doesn't mean what you think it means. We're talking minutes to hours here which in the financial world is a far cry from "instant" and that means substantial exchange rate risk. On an asset that is fluctuating by double digit percentages within a few days that can mean a very substantial difference in value from the start of an exchange transaction to the finish. Saying there is no risk of price fluctuation is quite simply wrong.
Regardless, the same would apply. Though I'd be surprised if the exchanges aren't doing any of their own buying of BTC in the process during the bubble. They would know before almost anyone else when to sell - and they could prioritize their own holdings.
Lightning Network should allow it to be used as a currency.
Doesn't work if the exchange rate moves too quickly.
But even without use as currency, it can still be a good investment.
If you have a high tolerance for risk then maybe. You might have better odds in Vegas though.
Nobody uses gold as currency, but still they invest in it.
Gold has tangible uses aside from serving as an investment vehicle and it isn't generally very volatile relative to the dollar over short time periods. Hard to say the same about bitcoin.
I guess my question is this...how much of the increase is driven by people trying to throw money at anything that will get them a huge return?
All of it. This is a bunch of people trying to Get Rich Quick. That much is obvious. WHO is driving it is a different question. My guess would be some combination of irrational exuberance and criminal enterprise. In financial terms bitcoin is a small and thinly traded asset and moving a market like that is child's play in the world of finance.
Or, when do financial advisors start recommending Bitcoin futures for Grandma's lump-sum pension payment?
Probably never unless they are trying to rob grandma.
For this particular story, what immediately started playing in my head was "All around the mulberry bush, the monkey chased the weasel..."
"When information is power, privacy is freedom" - Jah-Wren Ryel
If economists - the same people who are totally cool with infinite growth in a finite world - can't make sense out of something, you know it's real bad.
"When information is power, privacy is freedom" - Jah-Wren Ryel
At $17K you could make money mining at home today. You have to do it on specialized ASICs (the most popular are from Bitmain). You'd never actually mine any bitcoins, but you'd join a pool and get some BTC as pool payouts.
If you like having a 1.6kw device that sounds like a jet turbine running in your house for the next 8 months, that is.
http://pixa.club/en/the-simpso...
Ben Carlson is either nuts or only cares about the short-term gain of his own stock holdings. In terms of the big economic picture, nobody should want to see a 20% gain in the stock market in a single day.
https://www.smithsonianmag.com...
The main argument against is __something that didn't happen in reality__
Why would they have to buy BTC? People are not going to try and move their BTC out. If they sell, it's to someone else who's buying. The exchanges just pocket the transaction fees.
They may suspend trading temporarily due to built in circuit breakers to protect the market. But they're not going to lose money. (Except on paper, with all the BTC they are holding themselves).
The best realistic scenario for bitcoin holders right now is a correction back to the $8-10K range and a saner move forward. This is looking like a flameout if not a supernova at the moment. I'd bet the developers are on their knees praying for a correction while simultaneously trying to decide how to rush a solution to the energy problem.
This is the Dutch Tulip Mania Bubble all over again. No question. http://www.thebubblebubble.com...
There is no basis for the inflated price. It's like junk bonds now; no rational thinking. I wouldn't be surprised if a government was behind it. The price will obvious self destruct and go down below market at witch time I probably will buy some for shits and giggles. I wouldn't be surprised if it went down to $200 per coin. The true value of bitcoin is in the number of people that hold onto them and won't sell them.
Can you just read the reply to the other person who already asked the same question? The answer is the same. The exchanges will shut down due to a lack of buyers.
Pretty soon, pop goes the weasel!
Chas - The one, the only.
THANK GOD!!!
I had some residual left in Bitcoin from early 2016 (note I use the singular). I'd forgotten about this until the recent boom publicity and realised that just like Tulip Fever, it is based on nothing and may not climb much further. Anyway, I'm a happy bunny with the payout (x34). It will probably climb a bit further but many will lose in the crash.
Is it possible to short bitcoin so I can make money when it does crash?
In other words, what sustains its price if there aren't any tangible assets supporting it? I guess you could claim that it's value is whatever somebody is willing to pay for it but that's awfully close to sounding like a ponzi scheme. It may be me but this feels like the dot com bubble earlier this century when companies with no sales had ridiculously high valuations based on forward looking sales estimates or other such nonsense, big words meaning nothing. Pets.com, any one?
Companies typically have tangible assests and sales to support their stock prices. What is supporting bitcoin's valuation. I suppose one could argue that it's price is whatever somebody is willing to pay for it but that seems awfully close to being a Ponzi scheme. This feels like the dot com bubble that blew up at the beginning of the century when internet companies had ridiculously high prices without having any sales. Pets.com anyone?
The difference is, the stock markets represent people's monetary investments in businesses, who actually do employ people, manufacture things and provide services of value. When you buy Bitcoin, it doesn't put capital into business ventures.
Yes, I completely agree.
The problem is people not being prepared. My situation was in the dot.bomb I had a massive (for me) capital loss covering 2000 and 2001. The IRS sent me a bill for all the sales I did to cover margin calls. Since I didn't file a return covering the capital gains, they assumed that my basis was zero, so I owed $$$.
I imagine much the same kind of thing happening to other inexperienced investors, some of whom might actually pay the bill. (I was going to run for the hills until I actually got an explanation of what I needed to do by calling the IRS.)
Chinese hackers. Chinese miners control enough of the horsepower that they can completely manipulate the blockchain.
Your ad here. Ask me how!
Depends if you define drugs and illegal arms trade as "business".
Was the actual purpose to replace every transaction in the world, or to provide the foundation for a new system to replace the existing banks, and especially the SWIFT system for interbank transfers?
The difference is, the stock markets represent people's monetary investments in businesses
Yes and no. I draw a distinction between investing in, and being invested in, a company.
Example: If you buy stock in Smidge Industries LTD, that means someone is selling that stock. If SIL is selling that stock, then you are investing in that company. Your money goes to the business.
If, however, SIL is not selling stocks at that time, then you're buying from someone else. Your money does not go to Smidge Industries LTD, and they do not tangibly benefit from the transaction. However, you still own stock in SIL, so you are invested in the company.
But in the second case, your financial transaction means nearly nothing to the company. I say nearly, because with enough activity it can affect the price of the stock which, in turn, helps or harms the company's ability to raise more money by selling more stock if it chooses to do so. And since the vast majority of the stock market is transactions that don't involve the companies that issued the stocks being traded, I'd argue that the stock markets don't truly represent people investing in companies as much as they represent people being invested in companies.
=Smidge=
to see what some people say: "I will be there laughing when it crashes". But I like more the profits I have being making with BTC. In less than a month already recovered my initial investment, took up my dividends and am using to pay for many things around my home. So, for me, it's just great and I invite everyone to get in. Due to the volatility risks are high and profit is high so it's your decision... Or you can just laugh like the dude said. :)
My dealings with the IRS and letters have been very smooth. The one time the mistake was theirs, I explained it. They sent back a letter saying that I was right, they were going with my figures, and how to appeal that decision.
If you sold bitcoins and made a profit, file that in your income tax return. If not, they've got a legitimate beef, and you need to correct them.
Keep records, like you should for all investments. If you don't try to pull a fast one on the IRS (never recommended), you'll be fine.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
On 8 December 2017 at around 01:54 UTC, bitcoin was over US$17,147. Less than 11 hours later -- 8 December 2017 at around 11:35 UTC -- it was less than US$14,100. That is a drop of 18% or 1.84% per hour.
As economists attempt to make sense of Bitcoin
Some try, and succeed.
Some try, and can't even get a good understanding of the facts, before publicly embarrassing themselves by expressing ridiculous conclusions and opinions.
And some might even understand it well enough to know that what they're saying, good or bad, is not supported by facts. But that doesn't stop them.
There's no time like the present. Well, the past used to be.
To play devil's advocate here, by buying stocks second hand, you are providing liquidity, which makes a lot more people invest in original companies on stock market, because they know they will be able to get out of position in case of financial need. So, you are not investing in SI LTD directly, but you are, in indirect sense, enabling investments in all companies on the market.
It gets considerably more fuzzy with various derivative products. Still, I like to think that pure stock market is 'good', even if you are trading stocks which are already present on exchanges and all the 'lets get rich by moving empty money around' things are more on derivative markets (possibly also FX?).
The very notion of "Liquidity" is bullshit, especially in this situation.
Either someone is gonna buy the stocks you're trying to sell or nobody will. Buyers and sellers are essentially commodities. A stock doesn't become more "liquid" if A sells to B, or if A sells to B who then sells to C, or if A sells to C directly.
=Smidge=
Then last week, several major Chinese bitcoin exchanges including BTC China announced they would end trading by the end of the month amid reports Chinese regulators planned to shut down the exchanges.
Now we know why you are an AC, so you don't show your ignorance. BTC is ending trading and the exchanges are closing in China.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
The very notion of "Liquidity" is bullshit, especially in this situation.
Either someone is gonna buy the stocks you're trying to sell or nobody will. Buyers and sellers are essentially commodities. A stock doesn't become more "liquid" if A sells to B, or if A sells to B who then sells to C, or if A sells to C directly.
=Smidge=
Sorry, I disagree here. Stock where 1000 units is traded each day (A->B->C->D->E....->Z) is a lot more liquid that one which where 1000 units got traded once during a month (A->Z).
Did you READ the articles I linked? China has banned Bitcoin exchanges and use of Bitcoin within its borders. Good luck trying to spend Bitcoin in China, and if you're caught trading it inside China? I hope you like Chinese prison...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
It's cute how you insert an arbitrary time base.
Liquidity is about how easy it is to convert an asset's value, not how often. Frequent trades are not necessarily a good indication of liquidity; If at any given time there is no buyer for your stuff, then it's not liquid at that moment. You might think that frequent trades means more opportunities to sell, but it can also be that the market is saturated and any one specific seller might have a hard time finding a buyer.
All frequent trades like what you're describing can really tell you is it's not something worth holding on to for very long, which would be worrisome.
In either case, however, this does not help the business that issued the original stock unless and until they issue more stock of their own, and in absolutely no case are you investing in that business if you don't buy the stock directly from them.
=Smidge=