psionl0
Skeptical about skeptics
And 30 minutes later bitcoin dropped 200.
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According to the FT "Japan suspends trade on 2 cryptocurrency exchanges"
Irrelevant. So it should, but this makes a better buy price. I would never buy bitcoin in a fit, but it is an obedient slave to TA.And 30 minutes later bitcoin dropped 200.
psionl0
Skeptical about skeptics
Does "30 minute algo" mean something other than 30 minutes?PartSkeptic
Illuminator
More theft. Repay? No way?
PartSkeptic
Illuminator
Time to panic. The sky bitcoin is falling!
Sell! Sell! Sell!
Sell! Sell! Sell!
It occurs to me that one way Bitcoin might indeed be different from all previous bubbles cases where assets have greatly and rapidly increased in market value out of proportion to any increase in intrinsic value of the asset, is the existence of very large holdings that were initially acquired for almost nothing.
It always cost a nontrivial amount of money to source and transport a tulip bulb. That made it unlikely, if not impossible, for anyone to have been holding stockpiles of thousands or millions of them at the time of the market mania. Similarly, Beanie Babies were never available for a penny, a dime, or even a dollar apiece; therefore, while casual collectors sought variety (e.g. one of each new issue), the "investors" tended to focus on items believed particularly likely to rise in value, such as "rare" discontinued items and "limited-edition" releases, rather than sheer numbers. Neither practice resulted in many Beanie Baby paper millionaires.
With Bitcoins, early investors could buy in much larger numbers than latecomers. If I'd wanted to invest my retirement savings in Bitcoin in early 2011, I'd have bought several hundred thousand of them; at today's price, a few dozen. (Being a stodgy low-risk investor, the growth of my retirement savings through those years only has a small relative impact in that figure.) The recent "shoeshine boy" buyers, all told, can only afford a relative few compared with the early acquirers.
It would be interesting to see the distribution, or even just the mean and median, of acquisition cost (mining cost or purchase price) of all the bitcoins in existence. I suspect the median especially is actually quite low, and that large holders dominate that part of the distribution.
About half of all bitcoins were mined during or before the first quarter of 2012, when the price was in the three to five dollar range. The mining cost was presumably less than that (as mining did not cease). That gives us a starting estimate for the median acquisition cost of all coins currently held. Of course, a high churn rate since then (a large fraction of the bitcoins in existence changing hands since then at higher prices) would raise that median, but if that hasn't been the case, then there's still a large pool, a deep cold ocean so to speak, of Bitcoins that were last acquired at very low prices relative to the current market price. After all, at current prices it doesn't take many Bitcoins to keep the short-term speculators occupied.
So, what might be going through the minds of such large low-acquitision-cost holders? Imagine you own ten thousand Bitcoins that cost you ten thousand dollars to acquire. They're now worth a hundred million on paper. But nobody's buying them in such quantities at current prices. New hundreds of millions of dollars aren't flowing into the market. (They were for a while, but more recently they've been flowing out again, as sellers act to take profit or cut losses.) An investor like you once were, who wants to take the risk and buy in with ten thousand to invest, can only buy 0.01% of your collection. You need 10,000 people like you to replace you in the market, or one person willing to risk 10,000 times more.
You can still make huge gains by selling, but you'll take a big loss in paper worth in paper worth in the process, as your "dumping" lowers the price. On the other hand, you can keep holding, and the price might start soaring again. Or at least, if the market price stays in its current neighborhood, you can maintain a steady stream of income by selling a few at a time.
You can help keep your asset healthy by doing a little additional speculation of your own, buying the dips and selling the peaks, making enough profit along the way to offset the additional risk you're taking. Your own transactions won't make much difference, but if much larger holders also do the same thing, for the same reasons, that will support a floor on the market price, at least for a while. One drawback is, the one asset you can't use to fund this practice is your Bitcoin worth itself, so the support of Bitcoin-millionaires and Bitcoin-billionaires is dicey and might not be sustainable long-term.
If there's a "deep cold ocean," it needs to stay quiescent instead of churning up and cooling the market. That's quite possible, while those holders remain satisfied with paper wealth and future prospects. But every time one decides buying a better home or paying their kid's college tuition or traveling abroad while they're still young or paying medical bills or investing in some newer hotter thing has become a higher priority, the applecart would come a little closer to upsetting.
It always cost a nontrivial amount of money to source and transport a tulip bulb. That made it unlikely, if not impossible, for anyone to have been holding stockpiles of thousands or millions of them at the time of the market mania. Similarly, Beanie Babies were never available for a penny, a dime, or even a dollar apiece; therefore, while casual collectors sought variety (e.g. one of each new issue), the "investors" tended to focus on items believed particularly likely to rise in value, such as "rare" discontinued items and "limited-edition" releases, rather than sheer numbers. Neither practice resulted in many Beanie Baby paper millionaires.
With Bitcoins, early investors could buy in much larger numbers than latecomers. If I'd wanted to invest my retirement savings in Bitcoin in early 2011, I'd have bought several hundred thousand of them; at today's price, a few dozen. (Being a stodgy low-risk investor, the growth of my retirement savings through those years only has a small relative impact in that figure.) The recent "shoeshine boy" buyers, all told, can only afford a relative few compared with the early acquirers.
It would be interesting to see the distribution, or even just the mean and median, of acquisition cost (mining cost or purchase price) of all the bitcoins in existence. I suspect the median especially is actually quite low, and that large holders dominate that part of the distribution.
About half of all bitcoins were mined during or before the first quarter of 2012, when the price was in the three to five dollar range. The mining cost was presumably less than that (as mining did not cease). That gives us a starting estimate for the median acquisition cost of all coins currently held. Of course, a high churn rate since then (a large fraction of the bitcoins in existence changing hands since then at higher prices) would raise that median, but if that hasn't been the case, then there's still a large pool, a deep cold ocean so to speak, of Bitcoins that were last acquired at very low prices relative to the current market price. After all, at current prices it doesn't take many Bitcoins to keep the short-term speculators occupied.
So, what might be going through the minds of such large low-acquitision-cost holders? Imagine you own ten thousand Bitcoins that cost you ten thousand dollars to acquire. They're now worth a hundred million on paper. But nobody's buying them in such quantities at current prices. New hundreds of millions of dollars aren't flowing into the market. (They were for a while, but more recently they've been flowing out again, as sellers act to take profit or cut losses.) An investor like you once were, who wants to take the risk and buy in with ten thousand to invest, can only buy 0.01% of your collection. You need 10,000 people like you to replace you in the market, or one person willing to risk 10,000 times more.
You can still make huge gains by selling, but you'll take a big loss in paper worth in paper worth in the process, as your "dumping" lowers the price. On the other hand, you can keep holding, and the price might start soaring again. Or at least, if the market price stays in its current neighborhood, you can maintain a steady stream of income by selling a few at a time.
You can help keep your asset healthy by doing a little additional speculation of your own, buying the dips and selling the peaks, making enough profit along the way to offset the additional risk you're taking. Your own transactions won't make much difference, but if much larger holders also do the same thing, for the same reasons, that will support a floor on the market price, at least for a while. One drawback is, the one asset you can't use to fund this practice is your Bitcoin worth itself, so the support of Bitcoin-millionaires and Bitcoin-billionaires is dicey and might not be sustainable long-term.
If there's a "deep cold ocean," it needs to stay quiescent instead of churning up and cooling the market. That's quite possible, while those holders remain satisfied with paper wealth and future prospects. But every time one decides buying a better home or paying their kid's college tuition or traveling abroad while they're still young or paying medical bills or investing in some newer hotter thing has become a higher priority, the applecart would come a little closer to upsetting.
PartSkeptic
Illuminator
Good commentary.
I think the holders of large quantities of bitcoin are the key. I see that the Mt Gox trustee reported that $400 million was liquidated over a period of several months.
This is nothing short of moronic.
You recommend 'buy'. It falls. You say "even better reason to buy!"
If your poxy algo were at all accurate it wouldn't have fallen, or did it factor-in a fall before the rise? If that, why recommend the buy before the *real* buy at the lower number?
Stop talking crap in front of people who can read and do simple maths. Please.
You wait for a bad algo signal everytime.
I can do that to any tipster and prove nothing. You have totally ignored all the winning strategies recommended, including sell 10350 average.
psionl0
Skeptical about skeptics
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.
PartSkeptic
Illuminator
Bargain basement prices? For something that has no value at any price?
You are kidding yourself about "no shortage of buyers". It is headed for the trash-heap of history. Do you think those few geeks are going to buy again?
If we were talking about coal at $1 a ton there are plenty of power stations who would pay much more than that. That commodity has value and there would be lots of buyers if the price was low.
Down it goes. I reckon I may win the bet of $1,000 by April 1.
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psionl0
Skeptical about skeptics
We have been over this millions of times. Nothing has "value", only a price.
You might be desperately hoping that bitcoin crashes forever but plenty of speculators are willing to deal with probabilities instead.
trustbutverify
Penultimate Amazing
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- May 5, 2007
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- 10,542
Hilarious. You've lost practically every trade your imaginary algorithm has recommended, including one you claimed had a 98% probability of coming through. On yet another losing trade, you simply changed the entry price after the fact, as if no one would notice.
Delete your trading account.
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What an effortless string of falsehoods.
psionl0
Skeptical about skeptics
Don't be jealous. With a bit of effort, one day you might be able to produce falsehoods effortlessly too.
PartSkeptic
Illuminator
What would my motivation be for "desperately hoping"? I am observing from the sidelines. The only reason I took an interest was to prevent family and friends from losing a lot of money.
You are quite right about speculators - there is nothing of value being traded or sold - no functional value as a currency either.
At least you have retreated to insisting that crypto has only a price, and that value is in only in the minds of the people who buy it. We may yet convert you. Or should I say "de-program" you?
How far do you think this present drop will go before slowing/stopping/pausing?
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psionl0
Skeptical about skeptics
What is this "value" that you keep referring to?If you are referring to "utility" then bitcoin is still useful for permissionless transfers of large sums of money around the world for minimum cost and (relatively) rapid times.
PartSkeptic
Illuminator
If you are referring to "utility" then bitcoin is still useful for permissionless transfers of large sums of money around the world for minimum cost and (relatively) rapid times.
Great. Some progress maybe.
Permissionless transfers. Why is this useful except to crooks and money-launderers? If this was possible, many in South Africa would move their assets overseas and bankrupt the country.
The Guptas would just move all their stolen money out and leave the workers holding the (empty) bag.
Why 'large'. Drug money? What about the ordinary man in the street?
Minimum cost. Not bitcoin, unless it is a large sum of money.
Rapid. You reckon. What is wrong with the current times? What is the rush? Unless it is the cops at the door?
Give me a few concrete examples. No doubt you have done a few since you are such a fan.
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psionl0
Skeptical about skeptics
Kim Jong-un and Vladimir Putin couldn't have said it better if they put out a joint statement.
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