Bitcoin crashes, losing nearly half of its value in six hours

[guerilla]

BTCs main value to me is to see what a deregulated system might look like. But with mtg "owning" 80% of the market is is hard to see that it actually is functionally deregulated at this point. My assumption is that it wont work very well but it is too soon to call imho.

The problem is that deregulated systems take a long time to evolve and settle.

These "shocks" create the opportunity for better, more reliable exchanges to emerge.

That said, better exchanges or not, at the end of the day, BTC is badly flawed. Better exchanges may solve the price bouncing issues, but it won't solve the adoption and legal issues.

 

[Hurr-Durr]

dollars have no backing

 

[cpauser]

they did until Nixon (physical backing by gold). I agree with Krugman that the likelihood of the US defaulting on its debt is virtually zero, and this is why the dollar is the number one reserve currency in the world and why yields are so low despite the debt. but I'm also bullish on bitcoins because they are also a flight to safety play as we observed during the Cyprus bank levy.

 

[blogginginc]

dollars have no backing and unlike bitcoin there isn't a finite supply.
as i've written in the past, the dollar & bitcoin can both thrive together. In times of crisis such as cyprus people will flock to bitcoins and the US dollar.

yes, they have backing. The us gov issues debt that companies, inviduals or other govs buy to compensate currency emission.

 

[Hurr-Durr]

they did until Nixon (physical backing by gold). I agree with Krugman that the likelihood of the US defaulting on its debt is virtually zero, and this is why the dollar is the number one reserve currency in the world and why yields are so low despite the debt. but I'm also bullish on bitcoins because they are also a flight to safety play as we observed during the Cyprus bank levy.

Those that bought bitcoins solely due to the fact that it was rising in value, are lemmings that look to the market to guide them and precisely jump in when market moves up considerably and rush to the exits when it goes down (AKA buying high, selling low).

The problem is that there's no way to peg a "fair value" for bitcoins. Like other commodities, it can go up/down due to supply/demand and in and of itself has an ill-defined intrinsic value.

Notice how prices for goods that are sold in bitcoins aren't fixed, but fluctuate inversely to the bitcoins' market value in dollars.

Ironically enough, the volatility itself is self-defeating to the premise that bitcoin deserves to be a currency. If a "new currency" fluctuates so wildly in value with respect to a basket of other currencies, is the "new currency" really a currency?

When markets are moving up, it seems so easy to get caught up in the euphoria of easy money and jump in on the bandwagon.

 

[BlueYonder]

Gold tumbled almost $78 today, a bigger drop than I have ever seen. At least gold has industrial uses and you can wear it as bling. I'd buy gold before Bitcoins any day.

 

[Hurr-Durr]

Gold tumbled almost $78 today, a bigger drop than I have ever seen. At least gold has industrial uses and you can wear it as bling. I'd buy gold before Bitcoins any day.

Yeah. Even with gold though - yes there are industrial uses and yes central banks are printing money which may or may not cause inflation - there's really no way to price it. Is gold at $1500/oz cheap or expensive? $1200/oz? $1000/oz?

Depends who you ask. But if the current holders of gold believe that there's no money to be made in gold in the future then they will look to sell it to others. And if most people think that there's no money to be made in gold, then prices will fall precipitously.

 

[cpauser]

Those that bought bitcoins solely due to the fact that it was rising in value, are lemmings that look to the market to guide them and precisely jump in when market moves up considerably and rush to the exits when it goes down (AKA buying high, selling low).

The problem is that there's no way to peg a "fair value" for bitcoins. Like other commodities, it can go up/down due to supply/demand and in and of itself has an ill-defined intrinsic value.

Notice how prices for goods that are sold in bitcoins aren't fixed, but fluctuate inversely to the bitcoins' market value in dollars.

Ironically enough, the volatility itself is self-defeating to the premise that bitcoin deserves to be a currency. If a "new currency" fluctuates so wildly in value with respect to a basket of other currencies, is the "new currency" really a currency?

When markets are moving up, it seems so easy to get caught up in the euphoria of easy money and jump in on the bandwagon.

The longterm value of bitcoin is a function of several variables such as its usage for transactions relative to fiat (right now very tiny), the inflation rate of the goods used for bitcoin (about 2% a year) and the total circulation of bitcoin (11m). So let's assume that bitcoin has been fully mined and people are using it to trade Widget A (like weed or webhosting). If the price of weed is inflating at 2% a year in US dollars the price of bitcoin should have a corresponding rise.

 

[Jcraig83]

The longterm value of bitcoin is a function of several variables such as its usage for transactions relative to fiat (right now very tiny), the inflation rate of the goods used for bitcoin (about 2% a year) and the total circulation of bitcoin (11m). So let's assume that bitcoin has been fully mined and people are using it to trade Widget A (like weed or webhosting). If the price of weed is inflating at 2% a year in US dollars the price of bitcoin should have a corresponding rise.

The only value BitCoin has is that you can sell them for US Dollars. You think all those business' are accepting BTC becuase they love holding BTC? No, they are taking BTC because for the time being they can convert it back into USD.

Reminds me of this Dave Chappelle bit :

https://www.youtube.com/watch?v=8Jp22_M8wNQ

"You can't buy weed and pussy with Disney Dollars!"

EDIT : How the hell do you embed YT, tried [yt] and [youtube].

 

[Unarmed Gunman]

Reminds me of this Dave Chappelle bit :

https://www.youtube.com/watch?v=8Jp22_M8wNQ

"You can't buy weed and pussy with Disney Dollars!"

EDIT : How the hell do you embed YT, tried [yt] and [youtube].

Just paste the url - no need for tags. Also, links must be http only (no https) so you have to delete the "s" to get it to embed.

[ame="http://www.youtube.com/watch?v=8Jp22_M8wNQ"]Dave Chappelle - Can't Buy Weed And Pussy With Disney Dollars - YouTube[/ame]

 

[maybenot]

Know what the problem is when beginner "traders" attempt to make money trading? They can never find themselves to pull the trigger when they should. If you were given another chance to sell at $130, do you think you would? Of course not. You would tell yourself, well if it recovered this high up, it can definitely go higher. Let me hold on and sell it later on for a higher price.

The reason? Greed.

I felt exactly this happen to me today. I'd been holding gold for a little while as an experiment and I could have sold last week when it bumped up for a tiny profit, instead I held thinking it would continue going back up after the downward slide.. and then I ended up selling today at a $150 loss on my roughly 2.5k.

This obviously sounds totally pathetic, and if you're a trader I agree with you, it is pathetic.

I realized once it started going down again that I'm not a trader and that I had invested in something I had no clue about like an idiot, so I decided to cut my losses at $150 which I'm guessing as is the case for most of us is nothing. This way I get to learn a lesson cheaply - that I was a greedy fool. I've decided to go back to the old 'invest in what you know' and that will be investing in my own business. I can turn 2.5k into a lot more like that than by playing against much savvier people than myself on the markets. Lesson learned.

Not to say trading isn't great if you want to and consequently do dedicate yourself to it, like mGrunin for example.

 

[lukep]

I agree with Krugman

THAT'S IT!

BAN THIS PHAGGOT!!!!

 

[Dr. Scientist]

MY WORK IS DONE HERE.

I will not be discussing bitcoin on wickedfire anymore.

Those of you that are worthwhile already talk to me through PMs, come to my blog, or have my Skype username.

The rest of you are unworthy.

I've said all that I needed to say anyway.

Good luck to us all.

THAT'S IT!

BAN THIS PHAGGOT!!!!

 

[wickedDUDE]

I don't know much about bitcoin but I'm guessing it isn't regulated in the same way as the stock market.

Also, can they not produce an infinite amount of bitcoins? Other concerns are fear of hacking and that sort of thing.

The best investors always say not to invest in something that you don't anything much about. I would say for most people, this is one of them.

I will stick to index funds, thank you.

 

[CCarter]

Bro, that lawn mower is flying...​

 

[SHGDigitalMedia]

Gold tumbled almost $78 today, a bigger drop than I have ever seen. At least gold has industrial uses and you can wear it as bling. I'd buy gold before Bitcoins any day.

It dropped $78 but from a base of $1600 or 1700, which is about 5% If it did a bitcoin it would drop $1000 to equal bitcoin drop from $266 to $100

 

[PortraitArtist]

Guys calm the fuck down. Learn to make some mujdei and savour it.

 

[Digidex]

i thought it would continue to drop after the people who were in line waiting to purchase pulled the trigger at $70, but apparently not unless not enough time has passed yet....back over $100 on mtgox. i figured 24 hours would be enough time given the ridiculously fast ups and downs lately.

 

[mGrunin]

wow wtf did i seriously miss my chance to sell my coins at 130

i know in 2011 we got a really good deadcat bounce when it plunged from 32 to 10 and back to 25 (or 170-185 in today's dollars or enough for me to breakeven)

there will be no deadcat bounce this time around/going all the way to 50 probably..and then long slog to 5-10 or whatever the bottom is

too many coins in the float and not enough buyers

all these folks hoarding since 2010-2012 getting out

Yesterday BTC reached $125. You had a chance to unload your coins at a level you previously wanted. Did you? Probably not.

 

[Kiopa_Matt]

Yesterday BTC reached $125. You had a chance to unload your coins at a level you previously wanted. Did you? Probably not.

I'm the total opposite, and a little too trigger happy. Buy high, and sell low is apparently my motto!

I'm still up a decent amount overall, but won't be for long if I keep this up. Well, so much for my bot idea. That's out the window.