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Bitcoin Recovers Some Losses After Its Worst Week Since 2013 (reuters.com)
An anonymous reader quotes a report from Reuters: Bitcoin fell nearly 30 percent at one stage on Friday to $11,159.93. At 3:09 p.m. (2009 GMT) on Tuesday, bitcoin BTC=BTSP was up 15 percent at $16,030 in light trading on the Luxembourg-based Bitstamp exchange. The digital currency had risen around twentyfold since the start of the year, climbing from less than $1,000 to as high as $19,666 on Dec. 17 on Bitstamp and to over $20,000 on other exchanges. Critics have pointed to bitcoin's design flaws and hacks of digital "wallets" in which bitcoins are kept as an alternative to traditional currencies. Prices of other cryptocurrencies, which slid along with bitcoin last week, have also recovered, with Ethereum, the second-biggest cryptocurrency by market size, quoted around $771, up from Sunday's low of $689 but still far from highs around $900 hit last week.
Once the warehouses of Tulips clear at the temporarily lower prices, Tulip markets will return to astronomic levels, especially once the South Sea boats arrive!
-- Tigger warning: This post may contain tiggers! --
It is year end. It makes sense that some of the long term holders (1yr+) sell off to get the lower tax rates. Others maybe splitting the profits between 2018 & 2019. A few of those two groups and then a ton of panicked sellers cashed out.
Also people probably needed the cash to buy gifts during the year end sales or pay off things.
while True:
bitcoin.pump()
bitcoin.dump()
http://michaelsmith.id.au
North Korea probably cashed out, so they could afford a new missile or bomb or something.
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Hold them while you can, and don't worry, the price will be back up. Just as soon as those with enough money to manipulate the market are ready to cash in. You just need to sell before they do, and so the price goes back down again.
You thought the stock market was bad? Companies have intrinsic value. You can sell a physical hole in the ground for cash. Bitcoins are only worth what the people that don't have them assigns to them. Lets hope that value isn't zero anytime soon.
You're overlooking RightWingNutjobCoin. Understandable, as its staying under the radar now, so you have to wire some funds in USD over to my Cayman Islands account to get some. But it'll be sure to take off in no time flat. Even faster if you get ten friends to invest, and have them get ten friends. All on the up-and-up.
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See that "Preview" button?
Oh dear, a Reuters article that pimps a shit exchange called bitstamp. Why did I click this?
If you have to ask what a neck beard is then you might be one. People claimed bitcoin would collapse at $20, then $200, then $2,000. Here we are at $16k and doing fine.
Only the State obtains its revenue by coercion. - Murray Rothbard
Why does the US treasury spend more than 1 cent to make pennies when they are worth less than one cent?
It's because Currency has value _as Currency_
That's only _part_ of the value of BitCoin.
If a coin comes up heads 20 times in a row, I wouldn't bet on tails.
you're falling for a gamblers fallacy that a failure is 'due' because of all the success.
Are we going to have another bitcoin story every time the fucking price changes now?
Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
Wrong. Bitcoin has production costs that keep rising over time as the math to solve blocks get harder and harder by design. These costs set a bottom price for the coin that has to be paid for anyone to do any mining. Depending on the price of electricity and what kind of equipment one is using, that price is anywhere from a 500 to 1500 dollars per coin mined (not including hardware costs, that's just the electricity the actual costs with hardware are higher), and it's going to keep going up. You can't get the coins below this pricepoint, because at that price producing the coins will mean losses for the miners.
So the system has a built-in design factor that causes the costs to go up over time. This means there's much more than just 'experts' and demand at play when it comes to the price of the coin. If the value people assign to bitcoin drops below the costs of production, mining will seize and transactions will become impossible.
A more apt comparison to BTC would be if Basquait was creating and selling one such painting every 5 days, because at the current BTC market price (13 376 euros per coin) 100 million euros worth of new coins are created approximately every 100 hours.
If that was the case, his art would certainly be a bubble, as is bitcoin.
"It is the business of the future to be dangerous" -Alfred North Whitehead
Bitcoin has production costs that keep rising over time as the math to solve blocks get harder and harder by design.
No, the math doesn't get harder and harder. It is adjusted to keep the average at 6 blocks/hour. If more people start mining, the math will get harder, but if fewer people mine (for example because electricity prices go up, or bitcoin price goes down), then the math will get easier again.
When the value of the metal in a penny exceeds 1 cent, you'll probably find they start disappearing from circulation as people start to collect them and sell them for the metal.
All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
Long-time Wall Streeter here. Actually, the trading dynamics of BTC are very much like any other speculative vehicle, although the short-term volatility is unusually high. (It is hard to get exercised over the nearly 50% retrace that occurred since the peak just under $20,000, especially since its extent was widely predicted by quants. The bounce came almost precisely off the Fibonacci support level around $11,600.)
Someone else mentioned Forex and many have mentioned equities. (Funny, no one is comparing BTC to government-issued fixed-income securities, which have been in a true and highly destructive bubble since late 2008.)
Relative currency values are driven by short-term interest rates, but BTC doesn't pay interest. More precisely, there's no government that issues risk-free bills denominated in BTC into a well-regulated and highly liquid market. There's no overnight repo or carry trade in BTC.
Similarly with stocks, the value of BTC isn't anything like them. People here have said "a company actually has a value." That may be true, but a publicly traded equity isn't directly representative of it. This is a complicated subject, but the value of a stock actually is a measure of its volatility (so-called "beta") relative to the market as a whole, which in turn is correlated with the overall level of risk-free interest rates and risk-bearing rates. If not for the highly distorting effects of tax policy in the US, equities and debt as corporate-finance vehicles are structurally equivalent. BTC has nothing to do with any of this.
Can you compare BTC to other things that are traded speculatively, like oil, grains, and other commodities? Not really, because those things have day-to-day economic value. The futures markets have natural sellers (think of farmers and oil producers) and natural buyers (think of food processors, oil refiners, and finished-goods consumers like yourself). These markets have endogenous and basically stable dynamics. Again, BTC doesn't.
The best analogy I've heard of relates BTC to so-called real (as opposed to financial) assets. Your house is one, but you can live in a house so it has a stable long-term value apart from its value as an asset.
Gold is perhaps the closest analogy. About half of global demand for gold is for use in jewelry; about 10% for electronics and other industrial uses. That leaves about 40% that is held speculatively. If you talk to gold owners, they'll tell you amorphous things like they're hedging against inflation in fiat currencies, or they want independence from governments. Now THAT sounds like how BTC holders talk! In short, the "natural" source of demand for this asset is not all that well-defined, and in particular there is no natural seller of BTC (as there is with every other major asset class). That means there's no inherent source of stability in BTC, although I expect the advent of futures trading in BTC to change this.
So what is speculative gold worth? The overall supply of gold in the world doesn't change too much, and actually hasn't changed much since antiquity. At current prices, 40% of it is worth about $3 trillion (very roughly). If you assume that BTC can take on some or all of the economic function of speculative gold, that means it can be worth anywhere from zero to about $45,000 a coin (again, VERY roughly). As a classic disruptive technology, whether BTC moves into this role and takes a valuation somewhere in that range, depends in part on whether BTC can displace gold for mechanical reasons (for example, is it easier and/or cheaper to hold?) The answer to that looks like yes.
How does futures trading (in theory) add stability to BTC? Basically by adding natural sellers to the market. Futures trading enables professionals to embed BTC into an overall covariance matrix that relates all asset classes to each other. (Breakdowns in the covariance are what you see at times that are otherwise known as financial crises.)
When the value of the metal in a penny exceeds 1 cent, you'll probably find they start disappearing from circulation as people start to collect them and sell them for the metal.
Well, for one thing that would be a federal crime... Do so at your own risk.
For another thing, the cost to make a penny already far exceeds what one is worth. The cost to make a penny is 1.5 cents. So a 50cent roll of pennies costs 75cents to make. We're not seeing people taking coins out of circulation to sell them for metal.
Part of that is because, it costs money to break down a penny into it's constituent metals of course... and whereas a penny may cost 1.5 cents to make, that doesn't mean it contains 1.5 cent worth of metal.
All in all though, we should just get rid of the penny. It's useless and is too small a value to be worth anything. buying/selling to the nearest 5cent (as is done elsewhere in the world with currencies that have abandoned the smallest coin) would be a wise move. Inflation has killed the penny, time to stop making them.
"That's the way to do it" - Punch