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Bitcoin Tops $50USD on MtGox

mtgox.com

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Re: Bitcoin Tops $50USD on MtGox

#31

Post by zwtaylor »

Helianthus wrote: post #14
patejam wrote: post #12

Earlier quoted context omitted.

And it is terrible for legitimizing them. Why should someone adopt Bitcoins as a currency if there's not a stable value? Bring in all of the security issues that have been popping up as its popularity has increased and I see a decline in Bitcoin adoption coming soon. I don't think Bitcoins are the answer to the problems they are trying to solve.

Bitcoin hasn't been legitimate for a long time. The last boom-bust they went through proved that and nothing has changed since. If you still have Bitcoins, sell'em and don't buy more, except as an intermediary exchange for your discreet transactions.

If everyone took your second piece of advice and only used it for discrete transactions, then Bitcoin would be worth exponentially more than it is now, which would invalidate your first piece of advice. The number of bitcoin users is still exceptionally small.

Re: Bitcoin Tops $50USD on MtGox

#32

Post by trotsky »

habosa wrote: post #16

Is there any exchange where I can short sell bitcoins? Besides the fact that this will almost definitely be a profitable strategy in the near future, it would seem that allowing both short and long positions would create market stability. Most securities exchanges allow both short and long positions.

I'm far from a bitcoin bull, but shorting a market that's gained 500% in a few months is suicidal.

Re: Bitcoin Tops $50USD on MtGox

#33

Post by icebraining »

modeless wrote: post #29
oscilloscope wrote: post #18

Earlier quoted context omitted.

Here's a list of the top 100 large wallets from Dec, 2011. The biggest wallet then had 447785 BTC. Anyone have an updated list? http://bitcoinreport.appspot.com/

Wow, this is a fascinating list. So we know there are at least 25 bitcoin millionaires (bitcoin wallets with value > $1,000,000 USD).

For such large amounts, you can't simply calculate the number of bitcoins * price per bitcoin, since the act of selling such large amounts would itself affect the price.

Re: Bitcoin Tops $50USD on MtGox

#34

Post by josephagoss »

obiefernandez wrote: post #27

If 500 million people were to embrace Bitcoin to the point where they own on average $100 worth, then it would represent $50 Billion in value (500 Million x $100). With only 20 Million Bitcoins in circulation, each Bitcoin would be worth $2500. That's discounting other deflationary factors. I think it would be nuts to put all your savings in Bitcoin, but as a hedge against fiat currencies and interesting place to put…

I Speculate on Bitcoin by holding a few, but be-careful! First if you read the forums a lot there are a lot of scaling issues happening at the moment (Max block size) that mean Bitcoin cannot handle a large amount of transactions and this will put a big dampener on the BTC being worth thousands of dollars.

Second, time to buy is never when the price is sky-rocketing. Bitcoin is not perfect and we need to see what the devs do over the next year to decide if Bitcoin will ever be allowed to scale because at the moment Bitcoin cannot scale up beyond 2-4 times its current usage and adoption.

Re: Bitcoin Tops $50USD on MtGox

#36

Post by _delirium »

trotsky wrote: post #32
habosa wrote: post #16

Is there any exchange where I can short sell bitcoins? Besides the fact that this will almost definitely be a profitable strategy in the near future, it would seem that allowing both short and long positions would create market stability. Most securities exchanges allow both short and long positions.

I'm far from a bitcoin bull, but shorting a market that's gained 500% in a few months is suicidal.

Shorting a market that's recently undergone a significant price spike is actually a quite common strategy, betting that it's a temporary anomaly and will revert to the long-run trend. I have no idea whether it's a good strategy here, but it's hardly unusual. In fact, it's probably the common case: you short-sell things that you think are over-valued, and things that have undergone rapid escalations in price where your analysis doesn't conclude that the fundamentals support it are prime candidates. Lots of people made money shorting $140/barrel oil in 2008, for example; or shorting real-estate in the mid-2000s, which had been on a decade-long upward trajectory just prior to the crash.

Re: Bitcoin Tops $50USD on MtGox

#37

Post by frisco »

Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency?

A few reasons I can think of why it would:

* The current banking system is inherently insecure. If you have an account number and a routing number (written on the bottom of every check), you can pull money. Bitcoin is potentially much more secure.

* It's way too difficult to send money today, especially internationally, and fraud is a huge issue. We shouldn't need something like PayPal. Bitcoin solves this.

* If you don't have faith in banks or central governments, Bitcoin doesn't require trust in any third party to function. You aren't dependent on any bank.

A few reasons it might not:

* It requires too much technical knowledge to use and is unapproachable for mainstream users.

* It's too tied up with illicit interests and won't break out of that image, leading it to an untimely demise in culture. A fax machine is no use if no one else has one.

* There are lurking fatal flaws in the underlying technology. Maybe a blockchain fork is much more possible than currently assumed, or there's found to be an error in the cryptographic scheme.

* Mining power ends up concentrated in the hands of few when ASICs are in full swing and transaction fees aren't enough to keep individuals at it, giving power over the blockchain to a few (potentially malicious) actors. There's no guarantee transaction fees will actually pick up the incentive slack.

If you think that Bitcoin will ultimately be widely adopted, buy now. $50 / btc is very cheap in that world. If you think Bitcoin will fail, then any price is too much. Any mumbling that "it's doubled in a month and therefore is set up to come back down to earth" is just hand waving.

Re: Bitcoin Tops $50USD on MtGox

#38

Post by josephagoss »

habosa wrote: post #16

Is there any exchange where I can short sell bitcoins? Besides the fact that this will almost definitely be a profitable strategy in the near future, it would seem that allowing both short and long positions would create market stability. Most securities exchanges allow both short and long positions.

Also give https://www.bitfinex.com a go

Re: Bitcoin Tops $50USD on MtGox

#39

Post by shredfvz »

arasmussen wrote: post #10

It's literally doubled in a month. This is out of control.

Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50.

Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500.

Oh, but clearly society demands Farmville, you say? Clearly we don't need a new financial system ... more than we need to know who Joe Bob hooked up with this weekend.

As if there's no pain being solved here by Bitcoin. As if there are no problems with USD or the EUR. As if Cypriots are just pissed off over spilled milk right now. After all it's only a "haircut".

It's so funny to see how most people on HN are here to make businesses that scale infinitely. What could possibly, POSSIBLY, scale faster and more widely than an open source global currency? The price increase in the last month represents a trickle of people around the globe exchanging fiat for BTC. Just a trickle. Whereas most people are obviously hesitant to invest. That would include most people on HN.

The supply of Bitcoin is ridiculously tiny. Only 11,000,000 in total are in circulation today, let alone available for purchase on the market.

Sellers wanted. I acquired enough BTC to make me happy without being over the top - and I'm not ever exchanging it back into any other ass backwards asset class, gold and silver (and USD) included. Early adopters of BTC are from what I can tell mostly the same way, if crazier than I am.

Bitcoin is valuable because the world desperately needs to escape the current financial system. Individual sovereignty and financial privacy are the most scarce resources on the planet, bar none. It's not too late to acquire BTC, put it in a brainwallet and carry around $10k at all times. Now let's all go back to flinging monkey poop at consumers over the Internet.

Re: Bitcoin Tops $50USD on MtGox

#40

Post by plaguuuuuu »

trg2 wrote: post #3

Are bitcoins in a position to have a crash as tumultuous as last time, or is the currency more stable now overall?

It will probably crash. Obviously it has had greater accessibility and hype lately. Coupled with profitable mining becoming impossible for most people riding the boom looks more and more attractive. At some point in the future the buying volume will taper off due to less new speculators getting into the game.

If BTC had anything actually underpinning its value we could work out the ratio of how overvalued it is. Unfortunately it doesn't - even the fact that real transactions are made with BTC doesn't change anything, as the value is so elastic that a T-shirt selling for 1 BTC 6 months ago would sell for a fraction of the BTC now.

If the currency is stable now, what exactly is making it stable? Where does the equilibrium come from? Isn't it unstable by definition anyway since it's rising uncontrollably?

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