Bitcoin - Part 2

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Kick it while it's down said one site.

The awakening has begun....:D

http://time.com/money/5199825/bitco...ble-will-pop-soon-says-global-investing-firm/
“In our view, its intrinsic value must be zero,” Stefan Hofrichter, the company’s head of global economics and strategy, wrote in a recent web post. “A bitcoin is a claim on nobody—in contrast to, for instance, sovereign bonds, equities or paper money—and it does not generate any income stream.”

While one could make the same argument about gold, the yellow metal has been widely accepted as a store of value for more than two-and-a-half thousand years—compared to less than a decade for Bitcoin, he said.

Bitcoin is worthless and the bubble may pop soon, Alliance Global says
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psionl0 said:
It is not unusual for people who get in on the ground floor of something new to reap the biggest gains. Thanks to the blockchain, one can see which bitcoin wallets hold the most bitcoins and what their activity is (see https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html for example).

Of course, this doesn't say how many bitcoins are owned by a single entity since they may have several bitcoin wallets. However, in 2013 Sergio Lerner deduced that Satoshi Nakamoto most likely mined 980,000 bitcoins in 2009 and has never spent any of them. (This has been discussed previously).

It is difficult to gauge the effect of a high ownership concentration of bitcoin in the hands of a few. It is also difficult to tell what these people are or will be doing with their holdings. There has been so much speculation about major holders buying and selling bitcoins in an attempt to manipulate the price. This speculation is invariably presented as fact (the usual ISF standards of evidence don't apply to this thread).

Let us suppose a worst case scenario. Assume that there is a bunch of geeks who are willing to forsake their $billions in bitcoin holdings and that they try to crash the bitcoin price by dumping several millions of BTC on the market. What then? With bitcoin suddenly at bargain basement prices, there would be no shortage of buyers willing to take advantage of this situation. The blockchain would tell the whole story and let us know if these geeks could do it again. If not then most likely, the price of bitcoin would start rising again.
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That's not the worst-case scenario, though. A worse case, as far as future value is concerned, would be if major holders were manipulating the market to keep the price high (which of course they'd have much more motivation to do than to gratuitously and self-destructively cause a price crash). Such action could be completely licit (e.g. keeping the price high by buying), or not (e.g. fake back and forth sales that are recorded in exchanges but never actually paid for). Either way, the problem would be that it would eventually stop working.
 
trustbutverify said:
Getting a bit concerned for the Bitcoin family.
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I knew a family of four that sold everything on the basis that "God will provide".

He did not. After a year of waiting, and losing friends, they came to the conclusion that that he only provided for those who provide for themselves.

The silver lining it that one of the teenagers started a business that took off and the family made a pile of money - the old fashioned way - they worked for it.
 
Myriad said:
That's not the worst-case scenario, though. A worse case, as far as future value is concerned, would be if major holders were manipulating the market to keep the price high (which of course they'd have much more motivation to do than to gratuitously and self-destructively cause a price crash). Such action could be completely licit (e.g. keeping the price high by buying), or not (e.g. fake back and forth sales that are recorded in exchanges but never actually paid for). Either way, the problem would be that it would eventually stop working.
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Another example of where speculation trumps facts.

There must be a world of information about how major shareholders manipulate the price of shares through buying and selling. Have you got any examples so I can see how it works?
 
Doesn't the extreme ownership concentration in this market result in behavior resembling more of a shaky penny stock than the monster it is?
 
The inference that BTC ownership is highly concentrated, or extreme concentration is fertile ground for shenanigans, or both?
 
psionl0 said:
Another example of where speculation trumps facts.

There must be a world of information about how major shareholders manipulate the price of shares through buying and selling. Have you got any examples so I can see how it works?
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Try Barry Minkow who used a scheme known as "short and distort" against Herbalife. He shorted their stock and then published very negative reports about them. Their stock dropped and he made easy money.

In addition, Herbalife paid him $300,000 to drop retract his reports.
 
trustbutverify said:
The inference that BTC ownership is highly concentrated, or extreme concentration is fertile ground for shenanigans, or both?
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We have known that bitcoin ownership is concentrated forever so obviously I am referring to your non-seqiturish conclusion.

PartSkeptic said:
Try Barry Minkow who used a scheme known as "short and distort" against Herbalife. He shorted their stock and then published very negative reports about them. Their stock dropped and he made easy money.
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If you think that you can do something like that with bitcoin (create a false belief) then good luck to you.
 
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PartSkeptic said:
I knew a family of four that sold everything on the basis that "God will provide".

He did not. After a year of waiting, and losing friends, they came to the conclusion that that he only provided for those who provide for themselves.

The silver lining it that one of the teenagers started a business that took off and the family made a pile of money - the old fashioned way - they worked for it.
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Don't religious people read the Bible?
It's right there in Genesis.

God set the whole thing up like a nudist Club Med, then that bitch Eve had the incident with the apple and God explicitly informed everyone that the deal was off and we're on our own. Hard work is literally mentioned in that 'sweat of thy brow'-bit.

There are only two people I take really seriously; Old Testament Sky Daddy and Mr T.
 
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psionl0 said:
If you think that you can do something like that with bitcoin (create a false belief) then good luck to you.
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In some cases the best strategy may not be "short and distort" but "short and report". That is, go short and then create a true belief about it, and wait for it to fall. :)
 
Here is an excerpt from a technical analysis. They analyze the price fluctuations as if it were a stock with some underlying value. ;)

https://www.coindesk.com/6k-in-sight-bitcoin-could-drop-further-after-corrective-rally/

Tuesday's "inside day" doji candle highlighted bullish exhaustion around the critical double top neckline resistance (former support) of $9,280.

Further, Wednesday's negative follow-through confirmed that the corrective rally from the March 9 low of $8,342 has ended and signaled a revival of the downtrend. The pattern only adds credence to the bear flag breakdown seen on the 4-hour chart.

On the way lower, the cryptocurrency may encounter support at $6,410 (ascending trendline) and $6,000 as shown in the chart below.
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Bad news for bitcoin miners

Bad news for bitcoin miners: It's no longer profitable to create the cryptocurrency
"Bitcoin currently trades essentially at the break-even cost of mining a bitcoin, currently at $8,038 based on a mining model developed by our data science team," Fundstrat's Thomas Lee said in a report Thursday.

Fundstrat's model incorporates three factors: the cost of equipment, electricity and other overhead such as maintaining cooling facilities.

"In some cases the miners may simply turn off the machines until the price comes back a bit," said Shone Anstey, co-founder and president of Blockchain Intelligence Group. "It's got to be getting to the point that some of them may be losing money."

The median transaction fee, another source of revenue for miners, has also fallen below 50 cents from as high as $34 in late December
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With miners not processing transactions because there's no money to be made, what will happen to Bitcoin?
 
Craig B said:
In some cases the best strategy may not be "short and distort" but "short and report". That is, go short and then create a true belief about it, and wait for it to fall. :)
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Yeah, well, maybe, but some folk seem to be okay with speculating. They know that it's speculation.

I think that bitcoin will continue to prosper until it doesn't. I'm not interested in such randomness, but others seem to like it. Good luck to them.
 
The Blame Game

Whenever the price drops it's never Bitcoin's fault - something else has to take the blame.

Bitcoin price: Why is bitcoin falling? Has google destroyed bitcoin?
Analysts have speculated bitcoin took a hit yesterday amid fears Google’s new advertising policies would adversely impact the cryptocurrency...

Google’s announcement reads: “This year, we updated several policies to address ads in unregulated or speculative financial products like binary options, cryptocurrency, foreign exchange markets and contracts for difference (or CFDs).

“We also updated our gambling ads policies to address new methods of gambling with items that have real-world value (eg, skins gambling).”

The search engine giant claims to have taken down more than 3.2 billion ads which violated its policies in 2017 alone...

Matthew Newton, analyst at eToro, agreed Google’s new adverting policies took a hit on price but reminded cryptocurrencies have already been treading shaky ground this month. He said: “The impact of Google’s ad ban is clearly being felt in the market but prices were stagnating before the announcement.
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According to some, Bitcoin would have reached the Moon by now if it wasn't for evil corporations and governments trying to shut it down. But they don't seem to have considered that its attractiveness to criminals and scammers would inevitably require such actions being taken. It's not Google's fault that they have to deal to Bitcoin scammers, so it's not their fault if the price drops. That's on Bitcoin itself.
 
I issue ◊◊◊◊◊◊◊◊◊ every time when I burn electricity in the loo. I use filament lamps!
 
psionl0 said:
We have known that bitcoin ownership is concentrated forever so obviously I am referring to your non-seqiturish conclusion.
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My conclusion that extreme concentration of ownership in a tradeable commodity is fertile ground for manipulation? Particularly in a highly unregulated market like btc? You really consider that a non-sequitur?

"There is no regulation, unlike all other commodities that are traded," Shapiro said. "The ownership of bitcoin is very highly concentrated. ... A thousand people own half of the outstanding bitcoin. When you have such a high concentration, it's very easy for insiders to manipulate the currency for their own benefit."
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