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Bitcoin hits $200

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Re: Bitcoin hits $200

#61

Post by olalonde »

dancesdrunk wrote: post #50

I have merely a passive interest in economics, but my two cents: There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple var…

As long as there are multiple bitcoin exchanges, it will be very hard for a single exchange to influence the price of bitcoin thanks to arbitrage traders.

Re: Bitcoin hits $200

#62

Post by Diederich »

aneth4 wrote: post #27
graeham wrote: post #7

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't…

It's hard to say. There are many who justify prices far higher based on future adoption. Adoption is picking up at a remarkable rate. The USD money supply is around $3T or $10T, depending on whether you are counting money multiplied by leverage. The US GDP is $15T. If we presume that a currency then should be on the same order of magnitude of money supply as the GDP or transaction volume, it's not hard to project a $…

I've been asking my friends what they would consider the threshold for BTC to be considered a 'serious' global currency. We agreed that if it had $1T USD equivalent value, it will have arrived.

So, 22M BTC valued at $1T USD comes to $45K USD/BTC.

I have invested less than two thousand dollars into BTC. I consider it an epic gamble, but honestly, not an enormous one.

On the other hand, if BTC does 'go long', I could very well be in 'good shape'.

Here's the other consideration: the more unstable other currencies are, the less people all over the world trust their central governments with their currencies, the more likely people will move their money to a currency with no central control at all.

BTC is indeed turning into the place you put your money when things are scary. And there's a lot of scared people right now. Whether that anxiety is well considered is a separate question, and one that hardly matters.

Re: Bitcoin hits $200

#63

Post by rms »

eduardordm wrote: post #57

This last price fluctuation is doing more harm to bitcoin than a moratory does to a country. No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit? Why isn't mining regulating the prices? Is it too costly? My personal and completely uninformed opinion is that bitcoin is doomed.

It's happening because more and more people are buying Bitcoins are fewer are selling. Supply and demand. This interview talks about the real-time increased demand. https://news.ycombinator.com/item?id=5517634

Re: Bitcoin hits $200

#64

Post by xhrpost »

madaxe wrote: post #41
tomp wrote: post #33

Earlier quoted context omitted.

What's more likely is that a lot of people set their limit sell orders to 200, because the number is easy to come up with and easy to type.

Yeah, but that still basically says "Rank Amateurs", because you should never pick the psychologically obvious point, as otherwise you'll end up in the sell queue behind a gazillion others. Always best to go in a few points below the obvious level for your sell, and a few points above the obvious for your buy. If you look at any "real" market, prices rarely adhere to nice round sticking points, because people are at…

This behavior has had me wondering about the experiences people are going to get about how markets work. This one being largely unregulated could turn out to be more cruel than the stock market and some people are going to face the cold reality of that. I remember a few days ago when Mt.Gox. got hit by that DDOS, someone on Twitter was asking how Mt.Gox was planning to compensate customers if the value of BTC fell. Just enforces your point about the experience level of people driving this market.

Re: Bitcoin hits $200

#65

Post by rms »

vader1 wrote: post #28
graeham wrote: post #7

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't…

Most Bitcoin supporters agree that there are only two possibilities in the long run: either a fundamental flaw in the Bitcoin code or economics is discovered and the value drops down all the way to zero; or Bitcoin reaches a point of global acceptation causing the value to reach way, way above 200$. For someone who leans towards the second outcome, they see the recent rise as a 'correction towards the true value' rat…

If it's not a bubble, it's the first hyper-monetization. http://konradsgraf.com/blog1/2013/4/6/hyper-monetization-que...

Re: Bitcoin hits $200

#66

Post by rms »

dancesdrunk wrote: post #50

I have merely a passive interest in economics, but my two cents: There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple var…

So you think the price will be lower than $200 USD / BTC 3 years from now?

Re: Bitcoin hits $200

#67

Post by smackfu »

graeham wrote: post #7

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't…

It's simply more buyers than sellers. And there are more buyers because Bitcoin is getting more publicity.

Re: Bitcoin hits $200

#69

Post by rikf »

jbester wrote: post #43
Hermel wrote: post #22

Earlier quoted context omitted.

A better comparison than tulips would be silver. Tulips are a bad store of wealth (they rot, anyone can grow them, are not divisible, etc), whereas Bitcoin and silver can be stored and easily divided into smaller units. It still could be in a bubble, like silver was around 1980. http://silverprice.org/charts/history/silver_all_data_o_usd....

Not sure I buy either of the metaphors. Silver has industrial, scientific, and commercial (i.e., jewelry) applications that create demand and use the commodity. Bitcoin, on the other hand, does not. It's just used as a transitional currency.

It does have certain mathematical properties that make it rare. or at least harder and harder to produce as times goes on that leads to scarcity. And as we all know price = demand / supply

Re: Bitcoin hits $200

#70

Post by mfringel »

rms wrote: post #63
eduardordm wrote: post #57

This last price fluctuation is doing more harm to bitcoin than a moratory does to a country. No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit? Why isn't mining regulating the prices? Is it too costly? My personal and completely uninformed opinion is that bitcoin is doomed.

It's happening because more and more people are buying Bitcoins are fewer are selling. Supply and demand. This interview talks about the real-time increased demand. https://news.ycombinator.com/item?id=5517634

Every seller must have a buyer, and vice versa.

A better way to state it is: "More people are willing to buy at the seller's asking price, than are willing to sell at the buyer's bid."

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