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Bitcoin’s Price Falls 12%, to Lowest Value Since May

dealbook.nytimes.com

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Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#51

Post by pingburg »

avyfain wrote: post #46

At the end of the article the guy says: “What really defines the price is its reputation and expectations for the future.” But isn't that true of any currency? Isn't that why a green piece of paper with Benjamin Franklin's face on it is worth anything at all, just because we believe in the US government's stability?

It's an interesting question. I would argue that it isn't about the U.S. government's stability, but more about the confidence that you can use a dollar to buy x. And I don't think its a binary decision like the dollar will ultimately not be able to purchase x. Instead it will be how many dollars it takes to buy x and if the number of dollars increases rapidly, you get a sudden erosion of confidence.

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#52

Post by danbruc »

sunir wrote: post #49
danbruc wrote: post #27

This price fluctuations will not end until the destiny of Bitcoin has been decided, either fail and drop to zero or succeed and rise probably well above 1000 dollars. It's kind of remarkable that it did not die within the first 5 years if you consider all the small and big disasters but in my opinion Bitcoin is still in is infancy and it is far from clear where the journey will end. Compared with other means of payme…

The fluctuations will never end unless bitcoin itself ends. Its nature prevents a dampening force like a central bank to control wild price swings.

Wouldn't mass adoption help? If the market capitalization was for example 10,000 times the current one, it seems to me it would be quite hard to move the market as much as it happened in the past.

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#53

Post by foobarqux »

patio11 wrote: post #11
matthewbauer wrote: post #9

I don't like the reasons this article gives for the decrease. I mean if regulations had been the cause of this price drop we would have seen this sort of thing happening in July. My best guess is that this is caused by fear-based speculators who were trying to get rich on Bitcoin.

It was almost certainly caused by microstructure of the Bitcoin market: at least two exchanges allowed people to buy Bitcoins on margin, and published widely distributed statistics of how much aggregate margin was outstanding on a day to day basis. It did not take much Excel modeling to figure out the approximate price points for Bitcoin where the exchanges' published margin requirements would trigger cascading margi…

> published widely distributed statistics of how much aggregate margin was outstanding on a day to day basis.

Do you have a link? I didn't find those stats after a cursory look at the Bitfinex and BTCE sites.

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#54

Post by pjc50 »

avyfain wrote: post #46

At the end of the article the guy says: “What really defines the price is its reputation and expectations for the future.” But isn't that true of any currency? Isn't that why a green piece of paper with Benjamin Franklin's face on it is worth anything at all, just because we believe in the US government's stability?

"We" is doing a lot of work in that last sentence. It's rather like saying "English is only useful because so many people speak it".

The US dollar is, like the existence of the US itself, supported by the collective belief of its citizens and quite a lot of people outside its borders. That belief carries quite a lot of weight because it's difficult to dislodge.

The reputation of bitcoin is shorter and less clear, and expectations vary.

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#55

Post by rhlhkr »

gexla wrote: post #33

And I'm happy to be someone about to jump fully on the Bitcoin train and never have to think about the price of Bitcoin. As a U.S. citizen living abroad, Bitcoin is now at the intersection of cheapest, fast (but not instant) and most convenient for receiving my money. There are exchanges here which work automatically and have lots of options for me to receive my money. At this point, I can't say there is a better met…

tips fedora

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#56

Post by dreamdu5t »

TomGullen wrote: post #42

Price drop was most likely caused by cascading margin calls. As exchanges add more sophisticated features (such as trading on margin) amateurs continue to suffer and learn expensive lessons. Many Bitcoin advocates will heave at the idea of any form of regulation, Bitcoin unfortunately appears to be most attractive to libertarians. Yet their fellow advocates are suffering all around them for it. As an example, any lev…

Are you one of these amateurs? Do you have these anecdotes sourced somewhere or did you just make them up?

The price fell so that means we should have warning labels on the website because clearly everybody trading this thing is an amateur?

Can you produce one person who trades on margin without knowing what a margin is? Give me a break.

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#57

Post by smrtinsert »

TomGullen wrote: post #42

Price drop was most likely caused by cascading margin calls. As exchanges add more sophisticated features (such as trading on margin) amateurs continue to suffer and learn expensive lessons. Many Bitcoin advocates will heave at the idea of any form of regulation, Bitcoin unfortunately appears to be most attractive to libertarians. Yet their fellow advocates are suffering all around them for it. As an example, any lev…

Can't wait till they allow derivatives!

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#58

Post by gexla »

foobarqux wrote: post #47
gexla wrote: post #45

Earlier quoted context omitted.

Right, I have to convert USD to Bitcoin and then Bitcoin to USD. I haven't worked out the cost of what this would be compared to my current options. In my case, it's still cheaper, but that may not be the case for others. Coinbase charges a fee to convert on their end, but the exchange has a much small fee on their end. Getting the money sent from the exchange to me can be free depending on the option. Otherwise I ha…

I seriously doubt Bitcoin is your best option if you are dealing with any significant amount of money. What are you trying to do, how much money are you trying to move and how often?

I have lived here for 6 years. We have a large expat community here who regularly shares information on the best way to send money. I have spent many hours researching options to move money and I regularly spend time updating myself on latest options.

I don't think I need to get into my personal money habits here. If you haven't been an expat, then you probably don't know all the funky quirks of moving money here.

Let's just put it this way. The Philippines is one of the most active countries in the world for receiving remittances and Western Union is huge here. Can you imagine that Bitcoin could be cheaper than Western Union?

There are certain cases where you can get pretty cheap if you live in certain areas and your recipient lives in certain areas. For example, in L.A. there is a large Filipino community and remittance services in the Philippines have setup offices there, but these aren't services you can access over the internet. You have to live there.

You brought up a good point about conversion rates though. I will have to see what the conversion rates actually come out to. It's different because you aren't converting a currency. You are cutting out some of the processes that converting one currency to another goes through. But I may still lose some money in the conversion though.

I would get hit with the Coinbase fee, but apparently Circle is looking to do conversions for free. So, that might be even cheaper whenever they hook me up with an invite.

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#59

Post by jim-greer »

tomkarlo wrote: post #23
corin_ wrote: post #17

Earlier quoted context omitted.

Not massively useful, but interested me enough to look it up: $6.3B is more than the market cap of 40 companies in the FTSE 100

Yeah, but a 12% decline in the stock price of a company worth ~$6bn probably wouldn't rate an NYT story unless there was some additional element to the story (like fraud or scandal.) Look at the ~10 companies on the NASDAQ between ~6bn and ~6.5bn -- I've only ever even heard of one (Flextronics), much less seen NYT articles about them. (Use Google stock screener, I can't seem to generate a link to the screen.)

If it were a $6bn company that didn't exist a few years ago it's quite likely that it would be covered...

Re: Bitcoin’s Price Falls 12%, to Lowest Value Since May

#60

Post by gexla »

gexla wrote: post #33

And I'm happy to be someone about to jump fully on the Bitcoin train and never have to think about the price of Bitcoin. As a U.S. citizen living abroad, Bitcoin is now at the intersection of cheapest, fast (but not instant) and most convenient for receiving my money. There are exchanges here which work automatically and have lots of options for me to receive my money. At this point, I can't say there is a better met…

You guys have got to be kidding me. I write a comment about transferring money to a 3rd world nation, which is one of the greatest possible uses of Bitcoin in the future and my comment is getting attacked?

Of course people in 3rd world nations won't hold Bitcoin. Low income workers can't afford any volatility and they often can't afford to hold anything anyways.

What I'm trying to say is that Bitcoin is emerging as the best remittance option. This is one of the most exciting uses of Bitcoin. But it's not quite there yet for most people in the world. In the Philippines, it's here!

If an option is good for remittances, it's also good for an expat to remit money to him / her self.

In this scenario, we don't care about what the price is.

What's the problem with that?

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