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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#241

Post by eah13 »

niico wrote: post #46

Can someone explain me why this could happen? Large amounts of BTCs moving at the same time? What are your theories?

The simple answer is that sellers kept taking the 'ask' prices on the exchange until the only ones left were significantly lower. See this graph of current 'market depth' (existence of bids and asks): http://bitcoincharts.com/markets/mtgoxUSD_depth.html

In a double auction market, there are bids (offers to buy) and asks (offers to sell). The 'market price' is the last price at which a bid or an ask was taken by a market buyer. Taking a bid or ask removes that bid or ask, queueing up the next in line. In an illiquid market, there aren't many bidders and/or askers, leading to price volatility. In a liquid market (such as for US Govt bonds) there are many bidders and askers, meaning the price swings are much more likely due to a significant change in information.

Hence my contention that daily volume is the most important stat to watch on the BTC market. It's a proxy for market depth, which is a precondition for liquidity and relative price stability.

Re: Bitcoin falls from $266

#242

Post by Cthulhu_ »

smrtinsert wrote: post #112
ashray wrote: post #13

Before crying wolf, understand that bitcoin exchanges are unfortunately not battle hardened internet businesses. Two of the largest exchanges MtGox and bitstamp are both under DDOS. This may be an attempt by someone to make a large buy at a cheaper price. Due to lack of trading, prices are going downward. However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one…

Those people who converted their USD to BTC yesterday just got screwed. If only there were a central authority to regulate bitcoins volatility. oh wait...

Those that cashed in, though, are in the money. Even if they bought a few days ago, they still made a 33% markup. And the real winner is the exchange, who takes a certain percentage for each transaction.

Re: Bitcoin falls from $266

#243

Post by tommorris »

eksith wrote: post #146

BTC crashed primarily because the market suddenly got flooded by Bitcoinbillionaire : http://arstechnica.com/business/2013/04/bitcoin-crashes-losi... This bares repeating... The value of BTC is in the nature of the transaction; not the currency itself. People have turned BTC into a commodity instead of actually bloody spending it. Their old fashioned thinking still ties it to traditional fiat like a smoker trying to…

> BTC crashed primarily because the market suddenly got flooded by Bitcoinbillionaire

From the Ars Technica link:

> At the moment, no evidence links the currency's plunge with this random reddit charity.

I'm going with Ars on this. $12,000 to 12 people on Reddit isn't enough to bring the market tumbling down.

Re: Bitcoin falls from $266

#244

Post by riffraff »

jgoewert wrote: post #34
mjackson wrote: post #12

Get ready for the massive pop sound...

I'm going to believe that will happen soon. However, right now, it seems to me that Bitcoin is really just going "SHIFT". We have countries like Cyprus yanking money out of banks, so you get some people shifting their money out of country. So, what does it matter what a bitcoin costs if you are going to launder some cash out? 1:1 is a fabulous laundering rate. Buy 200 Euro worth of Bitcoin from an account in Cyprus -…

I don't think you should coalesce money laundering and bank tranfers into one concept.

Re: Bitcoin falls from $266

#245

Post by encoderer »

jessriedel wrote: post #217
crapshoot101 wrote: post #171

Earlier quoted context omitted.

correct in a sense- the US dollar is backed by the full faith and credit of the US Government, nothing more. Would I still have that faith in the US $ if the government did not collect taxes / did not seem like a stable entity? Probably not, but your point is still valid

> the US dollar is backed by the full faith and credit of the US Government Huh? What does this mean? This phrase can be applied to government bond ("The US gov't promises to pay you back") or to FDIC insurance ("The US gov't promises to refund your money if your bank closes"). But it doesn't have any meaning for dollars, unless it were to mean that the gov't would exchange it for gold, which of course is false.

Not true. The fact that you're somewhat informed on these matters is working against you here.

If the US Gov't stopped collecting taxes -- or had some other substantial liquidity crisis -- the very real issue is debt service. Since the USD is the global reserve currency, we are in the rather unique situation of having our debt denominated in our own currency under control of our own central bank. This is where the "full faith and credit" of the USA enters the discussion of our currency. If we had issues servicing our public debt, the government has the option of devaluing our currency. In other words, inflating away our debt. In such a scenario, the value of USD plunges against foreign currencies, and there would be a massive effort by everybody with substantial USD holdings to sell.

This, among other reasons, is why Keynes envisioned a super-national reserve currency traded among central banks. If the US public debt was denominated in Bancor, the option of inflating it away wouldn't exist.

Re: Bitcoin falls from $266

#246

Post by nhaehnle »

dia80 wrote: post #169
cs702 wrote: post #135

Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!" The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate. In the long run, however, if Bitcoin continues to work as in…

On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The attackers unload their bitcoin before the price gets smashed and presumably buy it all back again from frightened speculators. If anything it might be a positive sign for bitcoin that the attackers are keen to acquire it! On another note, mtgox.com the main…

> If real markets could get 1 hour behind in transaction processing because of a spike in volume it would be the end of capitalism as we know it.

That's (probably unintentionally) sad commentary on the state of our world today. After all, this trading is just finance. Truly forging the materials or implementing the algorithms that improve our standards of living happens in on a completely timescale, where a one hour delay of some financing operation (such as getting a loan approved) makes no difference at all.

Re: Bitcoin falls from $266

#247

Post by kaoD »

L0j1k wrote: post #237
awj wrote: post #198

Earlier quoted context omitted.

What DDoS attacks? So far I've seen no compelling evidence that this is anything but high volumes of legitimate usage.

As a long-time (since 2010) miner, I can tell you first-hand that there are massive DDoS attacks taking place against not only MtGox (who has already described DDoS against their infrastructure) but the pools as well. In fact, Reddit's pool (MtRed.com) is completely DOWN at the moment because of a larger DDoS than we've ever seen. You can keep drinking the "everything's fine" koolaid, or get with the reality that cur…

Nope. MtRed is down because they can't pay their miners. Variance is a bitch.

Re: Bitcoin falls from $266

#248

Post by encoderer »

sliverstorm wrote: post #157
jacquesm wrote: post #129

Earlier quoted context omitted.

US currency is backed by the land the US is built on and the means to defend that land, as well as the ability of US citizens to expend their time in a productive way. And to some extent it is currently based on the ability of the United States to protect its interests overseas, the trading of oil in the US dollar and significant trade partners accepting the US dollar as a means of exchange for goods shipped to the U…

I'd like to point out that this is the same for just about every country.

Not really. The USD benefits greatly from being the global reserve currency.

Re: Bitcoin falls from $266

#249

Post by Negitivefrags »

L0j1k wrote: post #237
awj wrote: post #198

Earlier quoted context omitted.

What DDoS attacks? So far I've seen no compelling evidence that this is anything but high volumes of legitimate usage.

As a long-time (since 2010) miner, I can tell you first-hand that there are massive DDoS attacks taking place against not only MtGox (who has already described DDoS against their infrastructure) but the pools as well. In fact, Reddit's pool (MtRed.com) is completely DOWN at the moment because of a larger DDoS than we've ever seen. You can keep drinking the "everything's fine" koolaid, or get with the reality that cur…

I thought MtRed was down because they shut it down?

https://bitcointalk.org/index.php?topic=15929.msg1793833#msg...

Also, just because MtGox had a DDoS in the past, doesn't mean they are having one now. I know first hand as someone who runs a service that has been DDoSed in the past that the moment you have server issues, all the users scream "They are being DDoSed!".

My experience here is just as irrelevant as is your own.

Re: Bitcoin falls from $266

#250

Post by pbhjpbhj »

quinndupont wrote: post #64
pc86 wrote: post #22

Earlier quoted context omitted.

Is it possible to buy from MtGox at $200 and sell in BTC China shortly thereafter at $275? I know nothing about BTC.

Yup, the arbitrage opportunities are real. Just yesterday the Canadian exchange (cavirtex) was trading $40CAD/BTC higher than MtGox (CAD); if you had an account with both, and free money to spare, you could take a handsome profit (minus fees, usually around 3% each, so 6% roundtrip)

Doesn't that cause the currency to collapse - only limited by the transaction rate? With no transaction limit you can pump for infinite BTC.

If I can do one transaction per minute for an hour at 6% return that's 10 BTC -> 370 BTC using standard compound interest formula. In 10 hours you're a quadrillionaire.

Edit: of course it's limited by the trades available ...

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