Bitcoin Plummets Below $8,000 For First Time Since November (axios.com)

Bitcoin's value dipped $8,000 this morning -- the first time since November 24, according to CNBC -- just hours after the cryptocurrency made news after going under $9,000. From a report: After the news that Bitcoin had headed south of $9,000, CNBC branded the range of $9,000 to $10,000 as "a difficult one for bitcoin to break below" after its surge over $10,000 last year.

Comments

Random number generator

[DrYak]

I think it's time that we categorize the "BTC to USB exchange rate" officially as a "strong random number generator" and call it a day ~
 
:-D

(NOTE: Jokes aside, that doesn't preclude that idea of the cryptocoins' decentralized protocols can be useful).

Re:Random number generator

[PopeRatzo]

There's nothing special about 8000. It's just another 10% decrease below 9000.

^^Slashdot math^^

Bummer

[110010001000]

I invested a lot of money in Bitcoin when it hit $10k. I better just hold onto it until it goes over $10k again, then I will sell. Until then, I'll just sit back and collect the dividends from it.

Re:Bummer

[jellomizer]

Buy High and sell Low!

Re:Bummer

[Oswald McWeany]

Buy High and sell Low!

I think a lot of bitcoin investors probably bought whilst high.

Re:Bummer

[jellomizer]

Unless it will still go down to its actual value. Thus you are still buying high.

The point of bit coins was to buy thing with it. Not hold onto it and convert to cash as a retirement fund.
While people are still hording it, and not spending them, they are in essence useless. Because even at 8k that is still too expensive and too volatile to risk buying stuff with it.

I remember the guy who bought a pizza for a lot of bitcoins. Which at the time was about $20.00 worth. Which only after a few years became Millions of dollars.

Re:Bummer

[110010001000]

What is the actual value of a bitcoin? It will go back up. Things always continue upwards.

Re:Bummer

[sjames]

And there's the issue. The bubble has to pop. The entire basis of bitcoin retaining value was that it would become an everyday currency used for buying and selling goods and services. It's current value and volatility preclude that, so it's valueation (not value) is supported primarily by investors running around like chickens looking for the next kernel of corn. Let someone yell BOO and it all goes to hell.

Re:Bummer

[GoJays]

That is if the stock even pays a dividend, not all stocks do. Fiat currencies don't pay dividends, let's not even get into Cryptocurrencies, Bitcoin might as well be a slot machine in terms of "investing". Those who "invest" in Bitcoin are about as smart as the gamblers who claim they consistently turn a profit at the casino.

Re:Bummer

[sjames]

But then you'll install windows 20 on it and the standard 12 anti-virus programs and the 6 hidden trackers and keyloggers and the performance will resemble an Altair.

Re:Bummer

[Oswald McWeany]

By then your typical computer will be fully AI and blockchain enabled and will be able to defend itself against virus and malware.

By then, your computer will consider you to be the virus/malware.

Re:Bummer

[tbannist]

What is the actual value of a bitcoin?

The actual (intrinsic) value of a bitcoin is $0.

The only reason it's valued above $0 is the perception that it has more value than that. I can't tell you whether Bitcoin will ever be valued above $10k in 2017 equivalent dollars, again because that's mostly down to the actions of speculators and possibly currency manipulators. There's also the small problem that there isn't really anything special about Bitcoin that make it inherently more valuable than Litecoin, Namecoin, Swiftcoin, Bytecoin, Peercoin, Dogecoin, Emercoin, Feathercoin, Gridcoin, Omni, Primecoin, Ripple, Nxt, Auroracoin, BlackCoin, Burstcoin, Dash, NEO, MazaCoin, Monero, NEM, PotCoin, Titcoin, Verge, Stellar, Vertcoin, Ether, IOTA, Sia, sixEleven, Decred, Waves, Lisk, Zcash, Komodo, Ubiq, EOS, Electroneum, TRON, Cardano, or Petro. It's value is basically based on speculation and name recognition.

Note, I left Tether off that list because Tether is inherently more valuable than Etherium because it is tied to $1 USD, but because it's tied it's value shouldn't fluctuate making it speculative value approximately $0.

It will go back up. Things always continue upwards.

As a warning, it's been almost 400 years since the peak of Tulip mania and looking at a Dutch flower exporter, the highest price is approximately $2 per bulb, but the high price in 1637 was reported to be around $100 guilders. That means the current price is approximately 3.6% of the peak value (using today's exchange rate). At that rate, the price will have fully recovered in approximately 10,000 years. Now inflation will surely cause it to reach $100 sooner than that (using historic rates, it would still take over 100 years), but the point is it could take a very, very long time to recover.

Re:Bummer

[Rolgar]

Can't tell if you are serious or not.

What happens when the cost of mining (processing transactions) drops below the amount you would make in new coins? If it costs $4000 in energy to mine a coin and the cost of bitcoin drops below that price $4000, and intelligent miners turn off their rigs or switch to other coins, and the entire house of cards that is bitcoin will collapse.

Re:Bummer

[110010001000]

I am using the tried and true method of dollar cost averaging to buy Bitcoins in this market. Now is a good time to buy. I believe that Musk will make Bitcoin his official currency for his Mars colony. They are launching Falcon Heavy soon and that is the first step.

Re:Bummer

[Aaden42]

The difficulty balancing algorithm prevents that from happening. The amount of computing power needed to solve each block is variable based on how much real time it took to solve the last block. The algorithm adjusts the difficulty (how much of hash has to be zeros in Bitcoin) to keep the solve time relatively constant.

If lots of people turn off their rigs for any reason, the current block will take a long time; but the next block will drop its difficulty to compensate based on available mining resources. If the difficulty gets high enough that cost of power exceeds the value of the coin mined, some people give up, and the difficulty falls accordingly until it reaches equilibrium.

Balancing should ensure that people who mine make a modest profit. It's only mad money for miners when the coin they mine is in the middle of an asset bubble that balloons its value almost before they've finished earning it. The bubble has to deflate eventually (I believe I hear a leaking sound now...), but mining should continue to stay profitable as long as people are interested in using coin.

Re:Bummer

[110010001000]

That is a good thing. You haven't lost any real money if you still own the shares. You only lose when you sell and can't recover your initial investment. That is Investing 101.

Re:Bummer

[beernutmark]

Yep. Any day now I expect my Beanie Baby collection to go back to it's old value and continue it's inevitable upwards climb.

Re:Bummer

[The123king]

Technological progression is not linked in any way to economics. If it was, there would have been no video games crash, no dotcom bubble, and no bitcoin bubble. Also just because my phone has more processing power than the Apollo Lunar Lander, doesn't mean it will get me to the moon.

Re:Bummer

[jrumney]

My cell phone can talk to me and answer my questions using AI.

You do know your voice commands really just go through to a call center full of carefully trained orcas, don't you?

Re:Bummer

[jwhyche]

I would be wary of any graphics card used in a mining operation. Most of those cards will be way overclocked with out adequate cooling, and ran for months that way.

Re:Bummer

[jwhyche]

You should get yours now,

I should get one to go with my 100 trillion dollar Zimbabwe bank note. How would I frame a bitcoin? I guess I could put it on a thumb drive then frame that.

Re:Bummer

[jwhyche]

I keep mine by the toilet. You know, just in case. At least they are worth something there.

Bubble Economics.

[jellomizer]

Products that are getting more expensive because they are expected to be sold for more money later. Is often creates a bubble condition.

The Bit Coin price kept on going up, so people wouldn't spend them, thus cause the price to go up further. Until they hit a peak were they decided to sell them. Then the market gets flooded with bit coins who's guaranteed value to increase is no longer expected. So they will sell them for less to get as much as they can out of it.

This happened with the Housing Market
This happened with the Tech Market
This happened with the Comic Book Market

  Lucky for us, the Bit Coin Bubble wasn't a big part of the economy, so the looser in the Bit Coin Gamble arn't bringing the rest of the economy down.
 

Re:Bubble Economics.

[vtcodger]

NY TIMES Nov 18, 2005 ... THERE is a venerable Wall Street joke featuring an investor who, having accumulated a large position in an illiquid stock, decides it is time to get out. "Yes, sir," replies the broker when he is told to sell. "To whom?"

Re:Bubble Economics.

[Anonymous Coward]

There is one more thing that's needed for a bubble, and that's leverage - investing with loaned money.

A rich guy who invests in ugly modern art with his own money, in the hope of making a profit - he has the option of just holding on to his asset forever, deluding himself about its "real" value. Even though nobody would actually buy it at the price he asks, he can pretend that's what it's worth.

But someone who's loaning money to buy ugly modern art, needs the asset to appreciate in order to pay interest on the loan. If it doesn't, the bank will eventually force him to sell to cover their losses. This will drive prices lower - and this can cause a chain reaction where other people investing borrowed money are forced to sell.

CNBC has fantastic track record.

[140Mandak262Jamuna]

CNBC branded the range of $9,000 to $10,000 as "a difficult one for bitcoin to break below" after its surge over $10,000 last year.

I know CNBC has fantastic track record. No matter how unlikely the event is, it would predict it just minutes after it has happened. Just minutes.

How can it be a prediction if it has already happened? The lesser mortals might want to know. So, I will come down from the heights and mingle with the commoners as Scar would like to put it.

Just seconds after an event the fantastic AI powered search will go through the archival footage of CNBC and find one talking head who predicted it. Within one minute that guy will be called. Within 3 minutes the video link would be set up. Within 5 minutes he (or sometimes she) would be on air, looking very intelligent and knowledgeable and explain how he predicted it.

People who fancy themselves to be intelligent, people who worship Scientific Method would ask stupid questions like, "on the same session when this talking head predicted it there were six other talking heads predicted the opposite. What happened to them? Why don't you call for their explanation? How many predictions by this talking head has been proven right?" etc etc ad nauseum.

To them, I say, "You are an index fund investing guy. Why are you even watching CNBC? Just chill, and get lost. CNBC owes you nothing. "

Re:CNBC has fantastic track record.

[110010001000]

Totally 100% correct. There is always "one guy" who predicts something and looks like a genius in hindsight. Some people are predicting $100 oil, some are predicting $20 oil. I just predict that Exxon is going to pay a regular dividend and remain relatively stable in price.

On what logic?

[chill]

CNBC branded the range of $9,000 to $10,000 as "a difficult one for bitcoin to break below" after its surge over $10,000 last year.

Based on what reasoning? There is no price support for BTC. There is no equity or guarantor behind BTC at all. Control is centralized in a small handful of "owners". They could make it go from zero to 100,000 in a day, if they decided to.

So what genius pundit decided there was a floor to the price, and how much does he get paid to make shit like that up?

Re: On what logic?

[AuMatar]

I other words, in pure bullshit. Technical are random patterns and luck, not market fundamentals you should rely on.

Re:On what logic?

[supremebob]

These people have made their living reading stock charts and looking for patterns, and have likely convinced themselves that they've figured out how to track it's value.

I'm not sure how valid their metrics will be for something as volatile as Bitcoin, that has been known to go up 10X in value in a year and then lose 80% of that value in 2 days.

Re:Below $8000

[Mr0bvious]

A boy asked his bitcoin-investing dad for 1 bitcoin for his birthday.
Dad: What? $12,250??? $19,350 is a lot of money! What do you need $8,800 for anyway?

Editorial Note

[vtcodger]

"Bitcoin's value dipped $8,000 this morning "

In English there is a difference between the verb **to dip** and **to dip to**. The latter is probably what was intended.

"Prepositions" are important and they do not like to be ignored.

Still Much Too High

[StormReaver]

Bitcoin's actual value is under a dollar. Until its price crashes down to that level, it is vastly overvalued. The word, "bubble" doesn't even come close to describing Bitcoin's current price.

Re:Still Much Too High

[Baron_Yam]

>Bitcoin's actual value is under a dollar.

That really depends on how you are measuring it. In practical terms, Bitcoin's value is exactly what you can get for it at a given moment.

It's digital casino chips for a house that doesn't exist - but as long as there's a table to sit at, there's some value, I suppose. Just remember that nobody has any obligation to cash out your chips when you want to leave.

And away we go...

[lillgud]

Finally reality has caught up with this inflated bubble. The lack of retailers accepting bitcoin as payment method and the horrible scaling issues which rendered micro payments impossible really made BTC a horrible option for what it actually was meant to be used for. Let just hope that the next big cryptocurrency can be used for anything other then speculation. Personally I spent my tiny investment a couple of weeks ago. The main SELL signal for me was when Steam stopped accepting BTC.

Re:Pop

[Anonymous Coward]

SELL SELL SELL

Yes. You should always sell when the price drops.
Once it goes back up again, buy.

Re: Bummer - omg

[110010001000]

Of course I am for real. This is the Internet.

Trading Places

[PopeRatzo]

There is something in investing known as the "Bigger Idiot Theory". It states that an investment is good as long as there is a bigger idiot who will pay more for it.

It appears that BitCoin investors don't have any bigger idiots left. They win the prize.

Re: Trading Places - no

[PopeRatzo]

I believe "bigger idiot" is more apropos in this context.

Re:You've been geeking too much

[NicknameUnavailable]

When your autocorrect's auto trained dictionnary fixes "USD" as "USB", you know that you've been a filthy consumerist pigdog way to much.

FTFY.

A lot of it

[kilodelta]

Is certain Asian and southeast nations cracking down on crypto-currency. Governments in those places are cracking down because they realized they had nowhere to track payments using BitCoin, Ripple, Ethereum etc.
>
But like it or not it's coming, Ripple is interesting though. They're looking to super-cede the SWIFT banking transfer method and of course extract their pound of flesh for the doing. And they've got some big banks on board, like Santander, American Express, etc.

Re:Pop

[HiThere]

Maybe. The thing is, a bit coin's intrinsic value is nothing. Not even the electricity used to mine it. So it could easily drop all the way to zero.

OTOH, it's useful to those who want to do unrecorded transactions. Until that shield is broken, it will retain some value. (Send me 8,000 bitcoins or all your files will remain encrypted!) It's not clear that the social value of bitcoin is positive. It's certainly expensive to generate new ones, and it's designed so that the cost of that can be expected to increase without limit if it continues to be used. Which means that over time, if it continues to be used, it will consume more electricity (or at least computations) than everything else that humanity does put together....unless P = NP, or there's a bug in the algorithm, or some other unlikely thing. (Is a bug *that* unlikely?)

Thus I think that bitcoin is likely to be a net social detriment. And this is without regard to whether some small group could take it over.

Re: Trading Places - no

[PopeRatzo]

I upvote your BIT.

Finally, somebody gets it.