Bitcoin drops below $10K after three days of cryptocurrency correction(techcrunch.com)
techcrunch.com
Bitcoin drops below $10K after three days of cryptocurrency correction
https://techcrunch.com/2018/01/17/bitcoin-drops-below-10k-after-three-days-of-cryptocurrency-correction/
146 comments
Pretty spot on. Investing in cryptocurrencies at this stage was just about taking money from the ones who got in after you.
Well, one positive thing about this drop is that it will hopefully get rid of the "get rich quick" crowd (no offence).
I'm looking forward to it. I have some ideas of actual use-cases for smart contracts, but the volatility of crypto-currencies is a major turn off. I want the speculators to go away so Ether can normalize at a reasonable value and it becomes sane to use them for their actual purpose.
I doubt ether will ever be valuable for smart contracts with the high fees.
Anyone wanting to do it will build their own platform for it, like IBM and Maersk. Because why wouldn’t you?
Anyone wanting to do it will build their own platform for it, like IBM and Maersk. Because why wouldn’t you?
I feel sorry for the people who still haven't learned that electronic currency will recover.
It's going to rise again and these crashes are going to happen a few more times before it crashes for good.
Now is a good time to buy, like every crash before.
edit: Wait, I'm doing it wrong... Everybody should panic. This is the end!!111
It's going to rise again and these crashes are going to happen a few more times before it crashes for good.
Now is a good time to buy, like every crash before.
edit: Wait, I'm doing it wrong... Everybody should panic. This is the end!!111
Would you please stop posting unsubstantive comments here?
Cryptocurrency threads have become so reliably awful that I think we're going to moderate them down for a while.
Cryptocurrency threads have become so reliably awful that I think we're going to moderate them down for a while.
Oh I’m sure it’ll recover eventually. I’ll be putting 10-20% of my winnings back in once it stabilizes, but the other 80% is going somewhere safe.
[deleted]
"As someone who has spent a good amount of time trying to value Bitcoin, I believe that the total value of Bitcoin has the potential to be worth $180-$220B within the next 12 months. Given that Bitcoin now has a market cap of ~$166B, I believe Bitcoin is undervalued and would be a smart value buy."
... is a statement you will never hear
"It went up, then it went down, then it went up, then it went way down, so I think it will definitely go up/down now."
... is the entire internet today
This reminds me of the signs that show gamblers past roulette spins, so they can say things like "It was red 5 spins in a row, it's definitely going to be red again!". What else are bitcoin speculators looking at besides past price moves?
... is a statement you will never hear
"It went up, then it went down, then it went up, then it went way down, so I think it will definitely go up/down now."
... is the entire internet today
This reminds me of the signs that show gamblers past roulette spins, so they can say things like "It was red 5 spins in a row, it's definitely going to be red again!". What else are bitcoin speculators looking at besides past price moves?
Pretty much. All this talk about "technical analysis" is nothing but tea-leaf reading. You're spot on with your roulette example.
Thats most cause there arent any underlying fundamentals to measure.. even in the stock market, yes there is an underlying company, but metrics such as P/E ratio's for specific industries are fairly arbitrary.. Similarly the stock market kind of operates on the principle that some day someone else might want to buy a share and guesses what price they might want to buy it for. Else the PE multiple would always be one..
Give crypto a few decades and you'll get similar analysis, I doubt stock markets had such data from day one either.
(Disclaimer: I do not trade in or hold crypto, and will not until some regulations kick in, espicially around an exchanges ability to shut down and keep all deposited crypto with it)
Give crypto a few decades and you'll get similar analysis, I doubt stock markets had such data from day one either.
(Disclaimer: I do not trade in or hold crypto, and will not until some regulations kick in, espicially around an exchanges ability to shut down and keep all deposited crypto with it)
I don't understand all the hate on this site for Bitcoin. Yes it is speculation, but I rather have people speculate on something like a digital currency than on things like food prices or real estate. In my building 40% of all apartments are vacant because they where bought to store money, on the other hand there are 50 people showing up for every rental with a decent price. So, even if Bitcoin goes up to $250,000 it will not have the negative side effects of other forms of speculation.
It does have the potential for negative effects; people will lose money that it was not sensible for them to risk. In that situation, it's worth trying to get people to clearly see the risk they are taking on.
I think there isn't really hate for it anyway, it's just that there is obviously a large amount of downside risk, so it is frustrating to people that see the risk to also see people talking about how Bitcoin is a great and safe investment (and there's nothing unique to Bitcoin about that frustration).
I think there isn't really hate for it anyway, it's just that there is obviously a large amount of downside risk, so it is frustrating to people that see the risk to also see people talking about how Bitcoin is a great and safe investment (and there's nothing unique to Bitcoin about that frustration).
Bitcoin uses tons of electricity (mostly from the cheapest sources: coal) to guess random numbers. And as the price of Bitcoin increases, there's more incentive to mine. Bitcoin speculation is absolutely detrimental to the planet.
The sad thing about this Bitcoin bubble is that it amounts to taking money from everyone who got in after you. That's the only thing that is giving it value right now: new people willing to pay higher prices for BTC. People have mortgaged their houses to get into this bubble, and many of them are going to be left holding the bag. It's not like people are buying BTC because it gives them a place to live or because it allows them to transact in a way they couldn't before.
The same thing can be said about the internet bubble.
The internet bubble created companies like Google or Amazon. When you bought into Google's IPO, Google received money which then purchased servers. At the end of the day, that's what stocks are all about. A mechanism to give your money to a public company.
A better example of recent history is how TSLA raised a bunch of money through stocks to build the Gigafactory. $5 Billion USD was raised through a combination of debt (aka: old-school banks) + Stock offerings, and now there's a working factory in Nevada churning out batteries and cars.
What does buying BTC do aside from increase the price? When you give USD to a BTC holder, all you did was reward that person for mining.
I think we can confidently say that all of the servers that were given to Google ended up creating something more than a a simple data-center. Google, as an entity, has more value than the sum of all of the servers that it runs.
Can the same be said about BTC mining equipment and BTC? No. Because at the end of the day, the value of BTC doesn't "grow" if you pump it full of USD. We already know the secret of blockchain.
Google's value grew in the 90s because buying more servers in the 90s allowed it to search more web-sites and build a better search algorithm. Putting $1000 into Google Servers made MORE than $1000 of gains later (as services like Google, GMail, Youtube, etc. etc. were all made on top of those servers).
In contrast, investing money into BTC doesn't actually do anything. There's no company that actually benefits, aside from bigger-and-bigger mining centers. The innovation is dead: the BTC community has become too bulky and politicized to accept even minor changes (like Segwitx2).
Besides, Segwitx2 doesn't need us to pump money into BTC miners for it to work or innovate. If BTC crashes tomorrow, the lightning network will STILL be developed and no harm will come to the innovators in the community.
A better example of recent history is how TSLA raised a bunch of money through stocks to build the Gigafactory. $5 Billion USD was raised through a combination of debt (aka: old-school banks) + Stock offerings, and now there's a working factory in Nevada churning out batteries and cars.
What does buying BTC do aside from increase the price? When you give USD to a BTC holder, all you did was reward that person for mining.
I think we can confidently say that all of the servers that were given to Google ended up creating something more than a a simple data-center. Google, as an entity, has more value than the sum of all of the servers that it runs.
Can the same be said about BTC mining equipment and BTC? No. Because at the end of the day, the value of BTC doesn't "grow" if you pump it full of USD. We already know the secret of blockchain.
Google's value grew in the 90s because buying more servers in the 90s allowed it to search more web-sites and build a better search algorithm. Putting $1000 into Google Servers made MORE than $1000 of gains later (as services like Google, GMail, Youtube, etc. etc. were all made on top of those servers).
In contrast, investing money into BTC doesn't actually do anything. There's no company that actually benefits, aside from bigger-and-bigger mining centers. The innovation is dead: the BTC community has become too bulky and politicized to accept even minor changes (like Segwitx2).
Besides, Segwitx2 doesn't need us to pump money into BTC miners for it to work or innovate. If BTC crashes tomorrow, the lightning network will STILL be developed and no harm will come to the innovators in the community.
Give it another 15-20 years and let's see what happens:
Ethereum, golem, decentraland, storj, ICONOMI,steemit, Basic Attention Token
funded buy bitcoin.
Ethereum, golem, decentraland, storj, ICONOMI,steemit, Basic Attention Token
funded buy bitcoin.
How is it "funded by" bitcoin?
Tell me. If all the money in BTC markets dried up tomorrow, would the cryptocurrency innovation stop?
I argue that innovation would continue, even if BTC crashes to $5 tomorrow. Because cryptocurrencies, as they are currently implemented, don't require money for people to improve them. The entire concept of "equity" and "market cap" is completely, and utterly devoid of meaning in this space.
If you buy up Google or TSLA stock, those companies have more money to actually make factories, data-centers, or buy computers. This happens through a mechanism called stock offerings. Ex: https://www.cnbc.com/2016/05/20/tesla-raises-146b-in-stock-s...
If you buy up BTC, the innovators do NOT get money. Only the miners do. Its way better to just Paypal the money directly to BTC foundation or directly to Etherium developers if you actually care about "funding" those projects.
------------
As it stands right now, the Winklevoss Twins are getting more BTC money than the BTC core developers. The "investment" scheme of the BTC world is broken. BTC "market cap" does NOT benefit the devs.
https://cointelegraph.com/news/winklevoss-twins-become-first...
Tell me. If all the money in BTC markets dried up tomorrow, would the cryptocurrency innovation stop?
I argue that innovation would continue, even if BTC crashes to $5 tomorrow. Because cryptocurrencies, as they are currently implemented, don't require money for people to improve them. The entire concept of "equity" and "market cap" is completely, and utterly devoid of meaning in this space.
If you buy up Google or TSLA stock, those companies have more money to actually make factories, data-centers, or buy computers. This happens through a mechanism called stock offerings. Ex: https://www.cnbc.com/2016/05/20/tesla-raises-146b-in-stock-s...
If you buy up BTC, the innovators do NOT get money. Only the miners do. Its way better to just Paypal the money directly to BTC foundation or directly to Etherium developers if you actually care about "funding" those projects.
------------
As it stands right now, the Winklevoss Twins are getting more BTC money than the BTC core developers. The "investment" scheme of the BTC world is broken. BTC "market cap" does NOT benefit the devs.
https://cointelegraph.com/news/winklevoss-twins-become-first...
if google, facebook etc get disintermediated by blockchain than the stock is worthless too.
The value is in the network. Not the code. Should devs get paid? yes.
why should a dev get any premium over any other early adopter that contributed value to a network?
In my opinion the work(dev, qa, docs etc) of a network should be put out for bid with a minimal as possible funded by trx fees.
Bitcoin already served it's purpose to get money into the crypto ecosystem.
The value is in the network. Not the code. Should devs get paid? yes.
why should a dev get any premium over any other early adopter that contributed value to a network?
In my opinion the work(dev, qa, docs etc) of a network should be put out for bid with a minimal as possible funded by trx fees.
Bitcoin already served it's purpose to get money into the crypto ecosystem.
> if google, facebook etc get disintermediated by blockchain than the stock is worthless too.
Stock can be worthless, but the resulting company can still provide a useful service and job to many.
Still, high stock prices provide a benefit to the company. Everyone knows TSLA's stock is overpriced, but that's basically a good thing for TSLA.
BTC is the opposite. At $20,000 per BTC, it was impossible to transact BTC for less than $30 per transaction. The network grew less and less valuable as the price of BTC goes up (and as BTC Transaction Fees are typically paid in... BTC... higher USD/BTC means higher transaction fees).
A high-stock price is beneficial to the company. A high BTC price is detrimental to the BTC community.
BTC will survive this crash. Cryptocurrencies will survive. AND they will become more useful when the prices drops down to something reasonable (Watch as transaction fees are dropping with these lower prices). It sure sucks for the "investors" who were suckered into believing otherwise. But seriously, there's very little value in attracting "dumb money" investors who would have lost their money in the next dumb penny-stock herd-mentality scheme anyway.
Stock can be worthless, but the resulting company can still provide a useful service and job to many.
Still, high stock prices provide a benefit to the company. Everyone knows TSLA's stock is overpriced, but that's basically a good thing for TSLA.
BTC is the opposite. At $20,000 per BTC, it was impossible to transact BTC for less than $30 per transaction. The network grew less and less valuable as the price of BTC goes up (and as BTC Transaction Fees are typically paid in... BTC... higher USD/BTC means higher transaction fees).
A high-stock price is beneficial to the company. A high BTC price is detrimental to the BTC community.
BTC will survive this crash. Cryptocurrencies will survive. AND they will become more useful when the prices drops down to something reasonable (Watch as transaction fees are dropping with these lower prices). It sure sucks for the "investors" who were suckered into believing otherwise. But seriously, there's very little value in attracting "dumb money" investors who would have lost their money in the next dumb penny-stock herd-mentality scheme anyway.
Like a bad strand of DNA bitcoin will probably die. The miners had too much power and so the chain didn't adapt.
> Google's value grew in the 90s
Google wasn’t even founded until 1998, and didn’t IPO until 2004. It wasn’t part of the dot-com bubble. Amazon would have been a better example (1994, IPOed in 1997).
Otherwise, good post.
Google wasn’t even founded until 1998, and didn’t IPO until 2004. It wasn’t part of the dot-com bubble. Amazon would have been a better example (1994, IPOed in 1997).
Otherwise, good post.
To a degree the internet bubble was sad. Many people lost their shirt in the dotcom crash when they took on debt to exercise stock options or mortgaged their homes to buy dotcom stocks that failed.
But, of course, the internet bubble allowed all the fiber to be laid that formed the backbone of the internet & that gave rise to the great internet companies.
I'm long cryptocurrencies and I believe the technology is going to persist. It would be nice though to be able to do it without a whole bunch of people losing their life savings in a bubble, but perhaps that's wishful thinking.
But, of course, the internet bubble allowed all the fiber to be laid that formed the backbone of the internet & that gave rise to the great internet companies.
I'm long cryptocurrencies and I believe the technology is going to persist. It would be nice though to be able to do it without a whole bunch of people losing their life savings in a bubble, but perhaps that's wishful thinking.
I agree with you. Just chiming in to say BTC speculation isn't a free lunch. The global energy consumed due to mining operations is staggering. Not linking any numbers because we've seen articles hit the front page of HN in the the recently past. So I assume this is common knowledge.
You are using a false choice fallacy. Sure, arguably better to speculate on bitcoin than food and real estate. But it would be even better if they didn't speculate on bitcoin too.
I think you are discounting how fucked some people will be when bitcoin inevitably drops to zero. A lot of people are putting their nestegg into it.
Also, food futures are almost certainly a good thing. It lets farmers hedge risk, which leads to more farming and overall lower prices.
I think you are discounting how fucked some people will be when bitcoin inevitably drops to zero. A lot of people are putting their nestegg into it.
Also, food futures are almost certainly a good thing. It lets farmers hedge risk, which leads to more farming and overall lower prices.
Perhaps because anything that is hyped up gets its due flak. This is not hate for Bitcoin per se but also the bunch of scam ICOs going around and "influencers" popping up every nook and corner.
Over that Bitcoin has no intrinsic value, and mining bitcoin is a huge energy drain! To a lot of people this is reminiscent of the gold rush and dotcom bubble of the yesteryears.
Over that Bitcoin has no intrinsic value, and mining bitcoin is a huge energy drain! To a lot of people this is reminiscent of the gold rush and dotcom bubble of the yesteryears.
any currency has minimal intrinsic value. That's what makes it a good currency.
It's a lot easier for people to invest in Crypto that it is to invest in pretty much anything else. This causes a lot more people without any knowledge of markets to get in. Also, the markets are not regulated and many cryptos already have proven to be shady at best.
I recently opened a stock trading account. Before being allowed to make a single trade, I had to complete a survey about my knowledge of the markets I'd be trading in. To start trading Crypto, you just need an account (often in shady markets, because it's easier to create an account) and money. And you only need like $100 in stead of 200k to speculate on the price of an apartment.
I recently opened a stock trading account. Before being allowed to make a single trade, I had to complete a survey about my knowledge of the markets I'd be trading in. To start trading Crypto, you just need an account (often in shady markets, because it's easier to create an account) and money. And you only need like $100 in stead of 200k to speculate on the price of an apartment.
Any idiot with a $1 can buy a lotto ticket. The only difference the government gets a cut.
Exactly, 'investing' in crypto is best compared with gambling. But the internet keeps calling it investing.
It's a reaction to the insane levels of hype and proselytizing that the enthusiasts constantly post on this site.
kind of like AI, VR, Saas etc.
Saas is a business model and it has largely proven to be a successful one.
There is certainly some VR hype, but its relatively tame compared to anything blockchain related and there are also multiple companies (Samsung, FB, Valve, Sony) that have produced successful (though, not blockbuster level) VR products.
AI is certainly considerably hype-driven and there are definitely some far-fetched prognosticators in the AI camp (e.g. AI singularity evangelists), however, the technology that is commonly referred to as "AI" has been integrated into and greatly enhanced the function of many software products with crosscutting effects on multiple industries. We also don't see AI enthusiasts trying to drive hype among the masses and encouraging them to get in early and put money into AI.
Blockchain tokens have demonstrated unique and interesting properties and have been an ideal tool for facilitating darknet commerce, but that is where the usefulness has ended. On the other hand, the blockchain proselytizers spread all sorts of nonsense about blockchains completely reshaping the entire political landscape, liberating the people from the tyranny of government, ending all wars blah blah blah. This is a stark contrast to what blockchains have actually been shown to be good at doing, which is pretty much just being a bitcoin. With most technologies, development continues over time and people get excited about the technology as it becomes more and more capable over the years, with blockchains the opposite is true where the enthusiasts are constantly trying to exclaim why everyone should BUY BUY BUY, come on, don't get left behind, are you some kind of luddite? If you don't love blockchain tokens its likely that you're just feeling threatened by the blockchain revolution and how it is disrupting existing power structures, sorry you're bitter that you didn't get in on the ground floor, these negative reactions to the blockchain are clearly the results of jealousy surrounding the 3000% ROI that crypto-investors were smart enough to take advantage of.. blah blah blah
There is certainly some VR hype, but its relatively tame compared to anything blockchain related and there are also multiple companies (Samsung, FB, Valve, Sony) that have produced successful (though, not blockbuster level) VR products.
AI is certainly considerably hype-driven and there are definitely some far-fetched prognosticators in the AI camp (e.g. AI singularity evangelists), however, the technology that is commonly referred to as "AI" has been integrated into and greatly enhanced the function of many software products with crosscutting effects on multiple industries. We also don't see AI enthusiasts trying to drive hype among the masses and encouraging them to get in early and put money into AI.
Blockchain tokens have demonstrated unique and interesting properties and have been an ideal tool for facilitating darknet commerce, but that is where the usefulness has ended. On the other hand, the blockchain proselytizers spread all sorts of nonsense about blockchains completely reshaping the entire political landscape, liberating the people from the tyranny of government, ending all wars blah blah blah. This is a stark contrast to what blockchains have actually been shown to be good at doing, which is pretty much just being a bitcoin. With most technologies, development continues over time and people get excited about the technology as it becomes more and more capable over the years, with blockchains the opposite is true where the enthusiasts are constantly trying to exclaim why everyone should BUY BUY BUY, come on, don't get left behind, are you some kind of luddite? If you don't love blockchain tokens its likely that you're just feeling threatened by the blockchain revolution and how it is disrupting existing power structures, sorry you're bitter that you didn't get in on the ground floor, these negative reactions to the blockchain are clearly the results of jealousy surrounding the 3000% ROI that crypto-investors were smart enough to take advantage of.. blah blah blah
Saas is successful for the companies offering it not the users who now are stuck on the companies update cycle, over paying for features etc.
Alot of these technologies have 10-20 or more years on most blockchain projects.
To me the usefulness blockchains is moving the power from the network owner to the network nodes.
Alot of these technologies have 10-20 or more years on most blockchain projects.
To me the usefulness blockchains is moving the power from the network owner to the network nodes.
How would you characterize the side effects if Bitcoin went down to $1,000. Or even lower?
Some people will loose, some will gain, but both parties are actively involved in the speculation.
I hear you. I hate house speculation because my family needs a house and I can't afford one where I grew up.
But I want as few broke people as possible in the society I'm part of. Each one adds a bit of stress to every social system.
But I want as few broke people as possible in the society I'm part of. Each one adds a bit of stress to every social system.
> I don't understand all the hate on this site for Bitcoin.
Envy and regret probably explains a lot of it. I wish Bitcoin would join politics in HN's off-topic list... the threads are generally crap and emotionally charged.
Envy and regret probably explains a lot of it. I wish Bitcoin would join politics in HN's off-topic list... the threads are generally crap and emotionally charged.
Even real estate speculators are paying tax which goes to things such as roads and schools. In addition they're incentivized to keep their property at some minimally viable state.
You also have to pay taxes on crypto gains.
Indeed, but with real estate you have to pay taxes every year (on both improvements and the land itself), in addition to taxes on the gains (unless you do a like-kind exchange) and anything you buy for your property (though much of that can be deducted). Not to mention holding real estate indirectly employees people to maintain said property.
In short, real estate speculation benefits the greater economy far more than coin speculation. That being said there are definitely downsides, such as vacancy, but that's more of a symptom of capitalism in general than real estate speculation in particular.
TLDR: Real estate speculation helps the surrounding local economy more than bitcoin, however both are unideal.
In short, real estate speculation benefits the greater economy far more than coin speculation. That being said there are definitely downsides, such as vacancy, but that's more of a symptom of capitalism in general than real estate speculation in particular.
TLDR: Real estate speculation helps the surrounding local economy more than bitcoin, however both are unideal.
Your example proved why those vacant apartments are a great place to park your money.
Agreed but I hope it keeps dropping then I'll be able to buy more.
It's true that it doesn't affect housing.
However the price does affect energy use, which for BTC is more than many (most?) countries now.
However the price does affect energy use, which for BTC is more than many (most?) countries now.
A crash had been expected for a while. It was going up way too fast too quickly. However in the big picture, this crash from $19k to $9k is just a blip on the radar. Even if it crashed further down to $6k we would still be at the all-time-high of 2½ months ago: http://bitcoin.zorinaq.com/price/
Don't forget the big picture that lots of people lost lots of money in the last couple of weeks.
People blow this off by saying that people shouldn't have invested money they couldn't miss, but those are the same people who kept telling everybody to 'hodl' and that it'll go to 100k. It may still, buy the people who need it the most can't wait for it to crawl back to 20k.
People blow this off by saying that people shouldn't have invested money they couldn't miss, but those are the same people who kept telling everybody to 'hodl' and that it'll go to 100k. It may still, buy the people who need it the most can't wait for it to crawl back to 20k.
If anyone "needs" it to crawl back to 20k in a period of a couple months, they've made some terrible investment decisions.
It seems to me like the reason for your comment was to signal confidence in the future of Bitcoin, even though what you explicitly said can be summarized as "Bitcoin is worth more than $0 so some buyers are still up." What you said explicitly is rather obvious but your implication is a much more interesting discussion.
How could this surprise anybody? Even back in November, just by analysing the time-series, there was ample evidence of what was to come:
https://mynabla.com/2017/11/30/bubble-trouble-exploring-an-l...
https://mynabla.com/2017/11/09/a-monte-carlo-simulation-of-b...
https://mynabla.com/2017/11/30/bubble-trouble-exploring-an-l...
https://mynabla.com/2017/11/09/a-monte-carlo-simulation-of-b...
Of course, you didn't short it by any chance did you? Since it was so obvious.
That's not a good argument. Shorting into a bubble is super dangerous, because while you can be highly certain that the bubble will pop, you can't predict how high it will go before it pops. The optimal way to trade a bubble is to be long for as long as your risk tolerance allows and then you stay flat. You only short once the bubble has popped.
Exactly, in my experience bubbles always last longer than expected. One example strategy: buy, and then sell half every time it doubles. You've turned an exponential gain into a linear gain, but once you've done that first sale you've de-risked the pop date.
If you cannot provide precise timing, it is by definition not a bubble, it's just confirmation bias around a volatile asset.
Please stop using the word "bubble." It tells you absolutely nothing useful about the price of Bitcoin tomorrow.
Please stop using the word "bubble." It tells you absolutely nothing useful about the price of Bitcoin tomorrow.
Sorry, I don’t see your reasoning here.
I could’ve saw that the NASDAQ was in a bubble in January 2000 and shorted it.
My timing of the top would’ve obviously been off, and I could’ve gotten margin called and forcibly liquidated (with realized losses) by the time it was at peak in March 2000. That does not mean there was no dot-com bubble, just that you could lose hard shorting at the wrong time.
There are ways to avoid margin calls with options, but time would still be working against you with theta decay, so you could still lose money if your timing is off.
I could’ve saw that the NASDAQ was in a bubble in January 2000 and shorted it.
My timing of the top would’ve obviously been off, and I could’ve gotten margin called and forcibly liquidated (with realized losses) by the time it was at peak in March 2000. That does not mean there was no dot-com bubble, just that you could lose hard shorting at the wrong time.
There are ways to avoid margin calls with options, but time would still be working against you with theta decay, so you could still lose money if your timing is off.
Legitimately asking: Can you even short Bitcoin? At least safely.
Shorts as a concept are designed around legally binding contracts. If you fail to pay out on a short you sell, they'll sue you and you'll be suspended in the markets. How would that work on something like Bitcoin?
Shorts as a concept are designed around legally binding contracts. If you fail to pay out on a short you sell, they'll sue you and you'll be suspended in the markets. How would that work on something like Bitcoin?
You can short Bitcoin via the futures markets launched in December by CME and CBOE. https://www.fool.com/investing/2017/12/10/cme-bitcoin-future...
You can open a short futures position in /XBT (1 btc contract) or /BTC (5 btc contract), but that is obviously not safe, and the margin requirements to even enter are insanely large. And they don’t offer options, so there really is no way to limit your risk.
I've shorted BTC a couple of times in an app (EU regulated) that allows CFD trading. Trading gets halted for a couple of seconds multiple times a minute when the market is very volatile though, so safely is a big word.
Two options off the top of my head:
1/ Use the CBOE or CME futures for this. Just need to signup with a broker and sell a contract. 2/ Borrow BTC frome a holder. Agree to pay some interest. Then sell that BTC.
1/ Use the CBOE or CME futures for this. Just need to signup with a broker and sell a contract. 2/ Borrow BTC frome a holder. Agree to pay some interest. Then sell that BTC.
Yes you can, without ever touching a bitcoin. CBOE offers cash settled bitcoin futures.
CBOE futures launched Dec 10 last year though, so they have only recently been an option.
I wonder how people trading those futures see the bitcoin market (my assumption is that many of them will be much more sophisticated than the typical "crypto" trader).
I wonder how people trading those futures see the bitcoin market (my assumption is that many of them will be much more sophisticated than the typical "crypto" trader).
You can now with the futures XBT
Do you know how shorting works? The only way to limit margin requirements of a short would be to buy puts, which would open you up to theta decay, and I don’t think there is anywhere that would even trade BTC options since the IV would be crazy.
I think Warren Buffet put it best, when he said that (paraphrasing) he would never short Bitcoin, but he would happily buy a whole stack of put options.
With the rate at which Bitcoin was going up, shorting it would be practically begging your broker to shower you with margin calls. That is assuming you'd be able to get a broker willing to help you take on that risk in the first place.
With the rate at which Bitcoin was going up, shorting it would be practically begging your broker to shower you with margin calls. That is assuming you'd be able to get a broker willing to help you take on that risk in the first place.
No I didn't. I first got into this argument 25 days ago on Reddit, I was asked back then why I wasn't shorting it if I was so sure it was bound to collapse in value... my answer then, and now, is that I cannot really be bothered. Yes, there's money to be made, but quite frankly, I run my own business and concentrate on making my employees’ lives worth living, not on placing myself in opposition to other people on the zero-sum field of financial speculation. My equity is in the privately-held firm and to offset that potentially-high-volatility I put all my savings into boring stuff like sovereign bonds of double and tripe A ratings. I like my investments to be boring. I don't want to sound arrogant but I count myself firmly in the “I have enough, no need to be greedy” camp.
Probably he/she didn't, because as you probably well know the market can remain irrational longer than most (retail) investors can remain solvent.
Knowing it was coming and knowing when are two different things. Better to buy when it's cheap(er) than to short and loose your shirt.
re: Your second link.
How is this 'evidence on what was to come'?
How is this 'evidence on what was to come'?
Not evidence, but it sort of comforts me that the bitcoin exchange rate seems to be trending towards the predicted median price that comes out of the Monte Carlo runs. Of course that could just be noise. It's the first one that I found particularly compelling (perhaps because I did research on LPPL dynamics back in the mid 2000s, so it's a technique I put some faith in).
By your own analysis it's a distribution. Why does any single draw from this distribution, even if it is close to the median, give you any comfort when the odds of being near the median were already extremely low in such a high variance distribution?
50% down from its high in December. People are comparing it to previous 20-30% corrections, but 50% is very different. This reminds me of the Mt. Gox crash, but there doesn't seem to be a clear indicator of what's driving this.
Is it though? Bitcoin corrected from $5k to $3k in September. During that same correction Litecoin corrected from $100 down to $27. This just seems like the 50% correction that's been overdue for awhile.
Yes, it is, it's when a correction becomes a crash. At least in stock trading the sentiment differs greatly between the two. Most people trading BTC don't have a clue about trading though, though the market will be a lot less predictable.
My point was that this sort of massive correction is pretty common and even predictable. After watching the gdax charts for months it seems like one law of crypto is "every price gets reached at least twice". The price of BTC blew past $10k and up to $20k very swiftly. The whales need it to do a full retrace so they can buy back in cheaply and hose the retail buyers.
No none has a clue about trading...stocks or crypto.
What's driving it is for whatever reason the price declined a bit, so people who were just in to speculate got worried and sold, but they had to sell to someone who was willing to buy, driving the price down, causing more people to sell, etc. Pretty classic behavior in this sort of situation.
early on bitcoin was, for a long time, regularly crashing to ~50% then rising to ~200%
2 - 10 - 5 - 20 - 10 - 40 - 25 - 100 - 50
when it crashed to 50 from 100 in 2013? 2012? i really wanted to buy 10 of them as i had observed the pattern for a long time. wish i had. oh well.
so clearly now it's going to rise to ~40k (kidding)
2 - 10 - 5 - 20 - 10 - 40 - 25 - 100 - 50
when it crashed to 50 from 100 in 2013? 2012? i really wanted to buy 10 of them as i had observed the pattern for a long time. wish i had. oh well.
so clearly now it's going to rise to ~40k (kidding)
Maybe I'm remembering it wrong, but I recall a point in time where it first rallied up to about $33 then crashed down to something like $2.
Why wouldn't it? If it is truly being used by financial institutions to transfer wealth then those are big pressures for an upward slope.
transfer wealth - what a joke.
You will transfer a hell of a lot less wealth today than last week - what a great method of transferring wealth!
You will transfer a hell of a lot less wealth today than last week - what a great method of transferring wealth!
But there have been 50% crashes before, right? (legit curiousity here).
Yes, memorably when the Mt. Gox exchange collapsed & others before that when there was very little volume.
The difference here is that it doesn't appear to be driven by any big event such as a major exchange collapsing. Possibly the Bitconnect crash is to blame, but who knows.
For me, it feels like Bitcoin has reached peak awareness so it's going to be more and more difficult to bring new people in, especially as a lot of people get burned on this crash.
It makes me kind of sad that /r/Bitcoin is all religious HODLers posting pictures of lamborghinis. Would be nice if there was actual interest in or use of the technology.
The difference here is that it doesn't appear to be driven by any big event such as a major exchange collapsing. Possibly the Bitconnect crash is to blame, but who knows.
For me, it feels like Bitcoin has reached peak awareness so it's going to be more and more difficult to bring new people in, especially as a lot of people get burned on this crash.
It makes me kind of sad that /r/Bitcoin is all religious HODLers posting pictures of lamborghinis. Would be nice if there was actual interest in or use of the technology.
Chinese new year?
Fundamentals?
I don't mean this in a flippant way, but I don't think there are fundamentals that support BTC at any objective price, since so much of the value is in speculation, both good (excited about the future utility) and bad (got 2 git dose mad gainz).
Unless you were being cheeky and saying its going to zero, in which case... I think its probably worth more than zero.
Unless you were being cheeky and saying its going to zero, in which case... I think its probably worth more than zero.
Fundamentals of a market really controlled by a few, which would be different than a large correction in the stock market over 2 days.
Not even the seemingly-infinite pumping of Tethers (now $1.6 billion and counting) can keep the price afloat. We're going to see further correction before the end of the month.
I’m pretty sure we’re going to find out that tether/bitfinex are insolvent fairly soon as people run for the exits and try to withdraw dollars.
I'm still trying to figure out if Tether is actually affecting the price
- Can you buy/sell bitcoin for tether?
- Has tether ever released an audit?
- Can you buy/sell bitcoin for tether?
- Has tether ever released an audit?
Yes you can, one of the bigger bitcoin US exchanges ONLY sells in tether. So if tether really did just print 1 billion fake dollars, that inflated the price of bitcoin substantially.
The had a CPA sign an affidavit swearing they had enough cash to match their tether tokens. The CPA firm seems legit. But he never looked at tether's books. The tether tokens are only one of many possible liabilities. If tether borrowed a bunch of money (from banks, users, etc), they could be easily insolvent while still having enough cash to only pay out tokens.
There is no legal mechanism to put tether token holders at the front of a bankruptcy creditor line.
And that was months ago. They printed 200 million tether yesterday. That amount seems unrealistically high.
The had a CPA sign an affidavit swearing they had enough cash to match their tether tokens. The CPA firm seems legit. But he never looked at tether's books. The tether tokens are only one of many possible liabilities. If tether borrowed a bunch of money (from banks, users, etc), they could be easily insolvent while still having enough cash to only pay out tokens.
There is no legal mechanism to put tether token holders at the front of a bankruptcy creditor line.
And that was months ago. They printed 200 million tether yesterday. That amount seems unrealistically high.
Bittrex allows you to buy/sell tether.
https://www.coinhills.com/market/-usdt/bittrex/
https://www.coinhills.com/market/-usdt/bittrex/
You can buy and sell bitcoin for tether, but you can't exchange tether for dollars. I believe they claimed they had been audited but didn't release any information on it, unsure.
Sigh. Those figures, why doesn't the Y-axis start at zero?
The chart does include 'zero' for its intended audience, just not the zero that you are used to looking at.
Financial types are only concerned with the % change. 'Zero' in the financial world means 0% change, i.e., the same price as it started with. A chart with a flexible axis will look identical when evaluated as a % change or as an absolute value, giving it a tremendous amount of utility when looking at the price action relative to various other things, indexes, pairs, sectors, etc...
Financial types are only concerned with the % change. 'Zero' in the financial world means 0% change, i.e., the same price as it started with. A chart with a flexible axis will look identical when evaluated as a % change or as an absolute value, giving it a tremendous amount of utility when looking at the price action relative to various other things, indexes, pairs, sectors, etc...
> Financial types are only concerned with the % change.
Yes, that's the point. If you let the Y-axis begin at zero, then you can intuitively read the change-percentages right from the graph!
Let's say something is worth $10, and tomorrow it's $11. That's a 10% increase in a day. Now suppose you let the graph start at $10 instead of at $0. You only see the $1 increase, and you have no clue about the change in percentage.
Yes, that's the point. If you let the Y-axis begin at zero, then you can intuitively read the change-percentages right from the graph!
Let's say something is worth $10, and tomorrow it's $11. That's a 10% increase in a day. Now suppose you let the graph start at $10 instead of at $0. You only see the $1 increase, and you have no clue about the change in percentage.
That's because no one looks at a chart with only two data points. Once you have a few hundred, you are less trying to determine individual percentage moves and more trying to determine the percentage change _relative to the other percentage changes on the chart_, which are obscured at best, and constantly changing as you compare with different things at worst.
You don't have to take my word for it. Every candlestick chart you will ever see uses a flexible axis unless the time series is expanded to include a period of time when it was at zero.
And its not because they never read Tufte. :-)
You don't have to take my word for it. Every candlestick chart you will ever see uses a flexible axis unless the time series is expanded to include a period of time when it was at zero.
And its not because they never read Tufte. :-)
If you read the text of the article, you see ALL the percentages referring to the total, not to the changes.
For example:
> Yesterday, Bitcoin was just a few dollars away from dropping below $10,000, but it bounced back around $11k, a 15% drop from two days before.
That 15% refers to the total of around $10,000 and not to some change!
The text is full of these examples.
(The fact that those candle-stick diagrams don't start at zero is because traders use technical analysis which indeed doesn't care about absolute values, but imho this shows how crazy it all is.)
For example:
> Yesterday, Bitcoin was just a few dollars away from dropping below $10,000, but it bounced back around $11k, a 15% drop from two days before.
That 15% refers to the total of around $10,000 and not to some change!
The text is full of these examples.
(The fact that those candle-stick diagrams don't start at zero is because traders use technical analysis which indeed doesn't care about absolute values, but imho this shows how crazy it all is.)
Not disagreeing with you about the utility of technical analysis, and not saying that was the best chart selection to illustrate the author's point, just pointing out that the reason the author didn't start at zero is not the same reason most charts don't start at zero (the chart person doesn't know the rules).
A metaphor might be if you listen in on a conversation between two experts and they are using jargon that you know is technically imprecise. If you say "that's not really what that means" then the response is usually "bugger off because we know what it means and there's a good reason we say it like that and we're not changing it just because you are listening."
A metaphor might be if you listen in on a conversation between two experts and they are using jargon that you know is technically imprecise. If you say "that's not really what that means" then the response is usually "bugger off because we know what it means and there's a good reason we say it like that and we're not changing it just because you are listening."
> there's a good reason we say it like that
But could you explain that in this particular case?
For instance, let's say bitcoin is at $10,000 and it moves a few cents up and down, giving big swings in your non-zero-based graph. Why are those big swings saying anything meaningful to a financial type?
In my graph, the line would be almost flat, and clearly indicates that nothing is really happening (low volatility).
But could you explain that in this particular case?
For instance, let's say bitcoin is at $10,000 and it moves a few cents up and down, giving big swings in your non-zero-based graph. Why are those big swings saying anything meaningful to a financial type?
In my graph, the line would be almost flat, and clearly indicates that nothing is really happening (low volatility).
> But could you explain that in this particular case?
Sure, its helps me to think through these things too. :-)
In your graph, you probably don't mind that its almost flat, but if I am someone who makes money by trading every day, I'm interested in very small moves, a couple of pennies, maybe 0.5% over the course of a day. And that's _all_ I'm interested in. Where is the price over the last few days and how does that compare to the price of some other thing?
Knowing the relationship of the current price to zero is really not important because it a) has never been at zero, b) is not going to go to zero, and c) zero is meaningless in pricing anyway.
That last one is kind of unintuitive. You can't buy or sell a share at a $0 price. A $0 price implies that there are no buyers or sellers. No buyers or sellers means means the price is undefined, not $0. No matter how low the price gets, it can never be assumed to trade at $0. No stock has traded at a $0 price (even in bankruptcy there are always some value to the shares right up until they are liquidated and cease to exist). No stock has ever opened at $0, they IPO in the $20-30 range (or somewhere non-zero anyway).
So if zero doesn't mean anything, then you have to say, what should the minimum be? Well, you can say $0.01, but that's just as arbitrary. Assets are infinitely divisible in theory, and lots of trades are made at lower denomination that the currency, take the $0.000000008 / share SEC fee.
If any choice is going to be arbitrary, then you have to go back to the intention, which is to compare current price movements to recent price movements to understand what's happening, so just make sure your chart has all the recent price movements and then add +/- something like 10% on either side to give some padding and emphasize breakouts... a.k.a a flexible axis.
In this particular case, I suppose it is the author's intention. If they wanted to emphasize the volatility of recent movements, a flexible axis is right for that. If they wanted to minimize the volatility, a fixed axis starting at $0 is better.
But, objectively, there is no reason to _insist_ on starting at $0.
Sure, its helps me to think through these things too. :-)
In your graph, you probably don't mind that its almost flat, but if I am someone who makes money by trading every day, I'm interested in very small moves, a couple of pennies, maybe 0.5% over the course of a day. And that's _all_ I'm interested in. Where is the price over the last few days and how does that compare to the price of some other thing?
Knowing the relationship of the current price to zero is really not important because it a) has never been at zero, b) is not going to go to zero, and c) zero is meaningless in pricing anyway.
That last one is kind of unintuitive. You can't buy or sell a share at a $0 price. A $0 price implies that there are no buyers or sellers. No buyers or sellers means means the price is undefined, not $0. No matter how low the price gets, it can never be assumed to trade at $0. No stock has traded at a $0 price (even in bankruptcy there are always some value to the shares right up until they are liquidated and cease to exist). No stock has ever opened at $0, they IPO in the $20-30 range (or somewhere non-zero anyway).
So if zero doesn't mean anything, then you have to say, what should the minimum be? Well, you can say $0.01, but that's just as arbitrary. Assets are infinitely divisible in theory, and lots of trades are made at lower denomination that the currency, take the $0.000000008 / share SEC fee.
If any choice is going to be arbitrary, then you have to go back to the intention, which is to compare current price movements to recent price movements to understand what's happening, so just make sure your chart has all the recent price movements and then add +/- something like 10% on either side to give some padding and emphasize breakouts... a.k.a a flexible axis.
In this particular case, I suppose it is the author's intention. If they wanted to emphasize the volatility of recent movements, a flexible axis is right for that. If they wanted to minimize the volatility, a fixed axis starting at $0 is better.
But, objectively, there is no reason to _insist_ on starting at $0.
> maybe 0.5% over the course of a day
But how does the trader know it's (on the order of) 0.5% by looking at the graph, if it doesn't start at zero? Now they have to look at the absolute value on the Y-axis, estimate the fluctuation in the graph and divide.
PS: appreciate your lengthy reply.
But how does the trader know it's (on the order of) 0.5% by looking at the graph, if it doesn't start at zero? Now they have to look at the absolute value on the Y-axis, estimate the fluctuation in the graph and divide.
PS: appreciate your lengthy reply.
There's usually an option to just convert the axis from absolute $$ to % change from the earliest data point.
Plus, most professionals aren't going to ever look at one particular stock, like an Apple trader will have Apple, a tech sector ETF and the S&P500. As soon as you add a second series the y-axis _has_ to revert to a percentage change. They'll all start at the same point, which will be labeled 0%, and then diverge.
Plus, most professionals aren't going to ever look at one particular stock, like an Apple trader will have Apple, a tech sector ETF and the S&P500. As soon as you add a second series the y-axis _has_ to revert to a percentage change. They'll all start at the same point, which will be labeled 0%, and then diverge.
You want a 1 day chart to start Y axis at zero?
What other financial investments do this? If the the stock market crashed tomorrow your not going to see people saying "We'll if you invested in '29 you would have been rich!"
They said it in 2008...
This! It seems all of the charts start Y axis at lowest value in timeframe, which is simply deceptive. For investors there is no difference if some currency rises from $10.000 to $11.000 or from $1000 to $1100. But there is huge difference between rising from $1000 to $1100 and $1000 to $1001 - which looks the same on these charts. </rant>
Either because the infographic designers haven’t read what The Visual Display of Quantitative Information about accurately depicting time-series, or because they have read The Visual Display of Quantitative Information and are abusing its dicta to make graphs that are as dramatic as possible.
You seem to have understood close to the opposite of the author's intent:
"In general, in a time-series, use a baseline that shows the data not the zero point." - Edward Tufte.
"In general, in a time-series, use a baseline that shows the data not the zero point." - Edward Tufte.
I'm delighted to see you're well-acquainted with the source. I'm absolutely certain he advocates having some kind of evident glyph in the Y axis to indicate discontinuity and the nonzero baseline, I think it was the classic // mark or something akin to it. Am I wrong? That's what I meant by abusing its dicta to make dramatic graphs.
I was at a visualization meetup last night and one of the attendees said something about blowing a sparkline up really large on the page and adding numbers to see it better and I quipped about Tufte rolling in his grave.
People don't read these days. :-(
People don't read these days. :-(
Apart from any other consideration, as far as I know Edward Tufte is alive and well.
I know, but no one got that joke either.
Well played.
Ha, sorry, unintentionally in your case. My humor does not always translate to the written word. :-)
The most hilarious aspect of this is that some irritable ignoramus has down-voted my “well played” comment. I'm beside myself with laughter.
I upvoted your back. And well played right back at ya.
For a general audience starting at zero is almost always the correct choice, but many exceptions exist such as temperature ignoring 0 kelvin.
It's a detail trade-off. Starting at zero helps the uninformed, but will obscure details.
It's a detail trade-off. Starting at zero helps the uninformed, but will obscure details.
> Starting at zero helps the uniformed, but would obscure the bonce back above 10,000
Starting at zero helps the well dressed, but would obscure the person's head back above 10,000?
Starting at zero helps the well dressed, but would obscure the person's head back above 10,000?
I'm of the opinion that while this is not an unusual move for bitcoin in its history, holders from the start who now have way too much of their wealth in coins should definitely cash out to a more reasonable amount.
There are lots of bitcoin millionaires out there who really need to think about what having >30% of their money in bitcoins really does to the volatility of their portfolio. It's still the same bitcoin from 2013, but do you really want it to be that much of your portfolio?
There are lots of bitcoin millionaires out there who really need to think about what having >30% of their money in bitcoins really does to the volatility of their portfolio. It's still the same bitcoin from 2013, but do you really want it to be that much of your portfolio?
[deleted]
$400B wiped out in the last few days. I wonder whose money it is and how much of it is real money from investors.
The underrated scary thing is that this stuff is so new, no one has a good theory on how to properly price any given crypto. The price is purely changed as they change hands at the exchanges
Great. Maybe now I can buy a 1080 TI.
On the cheap too, if you're buying used. :)
[deleted]
"Store of value"
"1 BTC is still 1 BTC" seems to be a popular saying in the Bitcoin forums.
and BTC is becoming less useful in the real world (unless you convert it to a real world currency)
Yea, it's a shame. I couple of years ago, I ordered a pizza in BTC. It was odd, because the price of the pizza in BTC would swing up and down while in the payment time window. It was also cool. Now it's no longer cool, it's become a money grab for some and a huge bummer for a lot of people who got in in December with they end of year bonuses. The innocent fun has disappeared and transaction fees an times have gone way beyond buying a pizza.
Only true if there is no way to convert a bitcoin to USD.
Which is why the exchangers are the weakest link, and why world governments are bound to attack cryptocurrencies from that angle.
Can't wait for "I told you so" gloating.
[deleted]
[deleted]
I feel sorry for the huge increase of people who got in post October, but I mean, my winnings had to come from somewhere and it sure isn’t the real world application.