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TinyUrl.com/About BITCOINS : DATA, Trading and Price Dynamics

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Like everything with Bitcoins... the action is fast.

Note the accelerating "waterfall drop" after 4pm (when the 10period MA crossed below the 26period MA)

... Chart-update

 

 

btcp.png

 

And since the waterfall drop was complete, there's been some very strong buying volume

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(One of my Skype contacts has said):

"a crash like that is probably engineered"

 

THAT could be right - here's some evidence that the waterfall drop could have been engineered (by hackers - working for ...) :

 

" Tokyo-based exchange said last week that hackers are engaging in a strategy to manipulate the price of the currency: “Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.”

 

It looks like this may be happening again. Aside from that, any kind of 400 percent increase over 30 days is probably unsustainable from a technical point of view. A correction at this point would be healthy and natural."

===

/see: http://techcrunch.co.../bitcoin-crash/

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I was on one of the bitcoin forums yesterday and all the talk was about how it was a DDOS attack. Not one of them mentioned that perhaps it might be way overvalued and due a correction OR the important fact that if sufficient bitcoin traders want to transact all at the same time the volume of Internet traffic may have the net effect equivalent to a DDOS attack. All the traders trying to trade at the same time overloads the mt gox exchange leading to massive widening of the bid ask spread and execution delays for trades. That's what we saw yesterday.

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Interesting.

In a market, which suddenly becomes illiquid, you need to pick levels, and have your Buy or Sell orders in ahead of Time.

 

I wonder if MtGox accomodates that. BTW, I doubt that they have STOP LOSS orders, which can be very dangerous.

But maybe I am wrong about that.

 

BTW,

We seem to be into Dive Time again ... update

 

bitcoint3.png

 

Volume is less this time (albeit, it is outside North American trading hours now)

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Wildly Different Prices ... for Bitcoins (on a wild market day)

 

--Market-- : --Price-- : Aver. : Change : 30dVolume : US$eqv.* (at $1.30 per Eur)

mtgoxUSD : 120.00 : 107.889 :+11.225% : 2,373,650 : $120.00 : +$31.00 : +34.8% : Most expensive

mtgoxEUR : E92.00 : E89.196 : + 3.143% : 0,238,724 : $119.60 : +$30.60 : +34.4%

 

btc24.EUR : E78.80 : E91.135 - 13.535% : 0,320,533 : $102.44 : +$13.44 : +15.1%

btce -USD : $89.00 : 111.567 :- 20.227% : 0,235,070 : $089.00 : +$00.00 : +00.0% : Cheapest

 

===

/source: http://bitcoincharts.com/

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Some of my thoughts from the 'George Soros and his General theory of Reflexivity' thread;

 

 

Bitcoin is a good example of a Reflexive bubble. Reflexivity in markets is where, for example;

 

 

 

1. People buy > Price moves higher > This encourages more buying > Sending the price higher still

2. People buy > Price moves higher > This encourages more buying > Sending the price higher still

3. People buy > Price moves higher > This encourages more buying > Sending the price higher still

4. Etc etc etc

5. Etc etc etc

 

 

 

The above is a self-reinforcing positive feedback loop, a self reinforcing system.

 

But it's not a normal positive feedback loop because within this self reinforcing system that created the bitcoin bubble there is a flaw.

 

btc_zps011da203.png

http://www.youtube.com/watch?v=SgsZHPrK6Sg

 

The flaw only becomes apparent to market participants once valuations are very far from reality. In this case the flaw is that whilst control of the currency is decentralised, the exchange and therefore trading of the currency is not. It's ever growing popularity, higher price and increasing trade volume led to the bitcoin exchanges becoming overwhelmed, selling becomes a panic and the market volume exceeds the exchanges ability to handle it. Now that the flaw within the market is clear, it is now a damaged market, and may not overcome the flaw, unless the flaw itself is overcome. So I say the method of trading bitcoins needs to change radically or the risk is that something new will come along that will solve this problem and it will become bigger that bitcoin.

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Wildly Different Prices ... for Bitcoins (on a wild market day)

 

--Market-- : --Price-- : Aver. : Change : 30dVolume : US$eqv.* (at $1.30 per Eur)

mtgoxUSD : 120.00 : 107.889 :+11.225% : 2,373,650 : $120.00 : +$31.00 : +34.8% : Most expensive

btce -USD : $89.00 : 111.567 :- 20.227% : 0,235,070 : $089.00 : +$00.00 : +00.0% : Cheapest

btc24.EUR : E78.80 : E91.135 - 13.535% : 0,320,533 : $102.44 : +$13.44 : +15.1%

mtgoxEUR : E92.00 : E89.196 : + 3.143% : 0,238,724 : $119.60 : +$30.60 : +34.4%

 

===

/source: http://bitcoincharts.com/

 

Don't quote me on this but I think Mt Gox trades Bitcoins (in many currencies). BTCe and btc24 are other types of electronic currency like litecoin (I think).

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For several HOURS now, there's been ZERO TRADING on the MtGox exchange

 

bitcoint2.png

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BITCOIN MERCHANTS - How are they reacting to the Sharp price drop?

 

(Now back below $100)

 

bitcoint3.png

 

I am still learning about the various pricing dynamics for Bitcoins, and I have wondered about this issue for a while.

 

5914558006_b558a86077_o-645x250.jpeg

 

Suppose a Merchant wants $100 for his product, and so with Bitcoin at $200, he will peg his product at 0.5 Bitcoins.

 

(When Bitcoin rises):

When the Bitcoin rises to say $250, then he will be happy to leave his price unchanged, and collect 0.5-BTC worth $125, instead of $100. Depending on the competition that he faces, he may decide to cut his price only if his internet sales volumes go down, and cut his price to regain a competitive edge.

 

(When Bitcoin falls):

When prices of BTC falls, there can be a real problem. Suppose Bitcoin falls to $100, and a merchant receives 0.5 BTC, he will get only $50 worth of Bitcoins for his "$100 product." If his cost of production is above that, then he will loses money on every sale. How long can he stay in business losing money? Not long perhaps, so he will have to raise the Bitcoin price of his product fairly quickly, or stop selling in Bitcoins at all.

 

(I wonder which of these actions Bitcoin merchants are takng.)

 

Having said this, there may be one type of merchant who may not mind lower prices... the software seller.

 

If the cost of production for the merchant selling software is close to zero, then such a merchant may not mind seeing such a big drop in the US dollar equivalent price. To produce more product, all he needs to do is to turn on his computer. The drop in price may seem like just a temporary sale, increasing sales volumes, and adding to the bottom line. (This is the situation for someone like Clif High, who sells reports, transmitted by internet.)

 

To me this suggests that most people selling products priced in Bitcoins, will be those (like Software sellers) with very low costs of production. Or alternatively, they will need a mechanism for quickly changing their Bitcoin prices when the Bitcoin falls. This could be a big problem for many merchants.

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BACK to Convergence - but at a much lower price

 

 

--Market-- : --Price-- : Aver. : Change : 30dVolume : US$eqv.* (at $1.30 per Eur)

mtgoxUSD : $67.00 : 107.288 :- 37.551% : 2,579,052 : $067.00 : +$00.00 : +00.0% : Cheapest

btce -USD : $67.90 : 105.894 :- 35.879% : 0,288,726 : $067.90 : +$00.90 : +01.3% :

mtgoxEUR : E50.90 : E87.153 :- 41.157% : 0,266,998 : $066.17 : - $00.83 : -01.2 %

===

/source: http://bitcoincharts.com/

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Don't know why, but I'm only just visiting this story, faint recollection of thinking pyramid selling in the past, but curiosity has made me look around and what strikes me most, is quite a few were warning of this some time ago.

 

Saw this thread on M.S.E for instance http://forums.moneysavingexpert.com/showthread.php?t=3473961

 

Then I read comments like these below on other blogs and I wonder how much some people may have won and lost?

 

These past days, I have done a lot of thinking about bitcoin that ended up with me investing all of the money I had saved and all that I can borrow into the currency. Here’s why.

In two posts now, I have considered the effects of bitcoin on society. A lot of more thinking has been done than has been described in writing, and it has resulted in me putting all my savings into this currency........

 

Here are the three key reasons I bet on bitcoin:

Past performance: the currency has increased in value one-thousandfold against the US dollar in fourteen months. Yes. Read that again: one-thousandfold, fourteen months. There is currently no indication it would stop or has saturated; quite the opposite.

 

Use case: the key advantage for bitcoin is that it does away with all bureaucracy, all transaction fees, and perhaps foremost, all transaction delays and gatekeepers in the financial system.

 

Key uptake drivers: doing the math, I predict that it has at least another thousandfold increase to go in the coming few years, and that’s counting conservatively.

 

http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/

 

Just feel sorry if some of the losers are not the money laundering crims doing a quick rinse out of Cyprus,but rather the ordainary Cypriots that jumped out the frying pan into the fire, just trying to protect themselves from the banks.

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Don't know why, but I'm only just visiting this story, faint recollection of thinking pyramid selling in the past, but curiosity has made me look around and what strikes me most, is quite a few were warning of this some time ago.

 

Saw this thread on M.S.E for instance http://forums.moneys...d.php?t=3473961

 

Then I read comments like these below on other blogs and I wonder how much some people may have won and lost?

 

 

 

http://falkvinge.net...s-into-bitcoin/

 

Just feel sorry if some of the losers are not the money laundering crims doing a quick rinse out of Cyprus,but rather the ordainary Cypriots that jumped out the frying pan into the fire, just trying to protect themselves from the banks.

 

I saw a confirmed trade yesterday where someone sold their bitcoins for $5.5 million on 10th April. Nice trade.

 

Can't find the link.

 

CNBC are now providing bitcoin quotes on their website! http://data.cnbc.com/quotes/MTGOXUSD

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Along with a few million others, we predicted both of these stories...

(QUESTION : Is the MSM trying to scare people... again?)

 

6.jpg

Cyber thieves target bitcoin owners

 

BBC News-17 hours ago

The bitcoin virtual currency has had a volatile 24 hours that saw values plummet, hack attacks, trading shutdowns and bitcoin-stealing malware.

. . .

Malicious software is emerging that seeks out and empties the virtual wallets of bitcoin owners.

MTGox, on which most bitcoin trading takes place, was overwhelmed earlier this week by the amount of people who joined the exchange to trade the virtual cash. The computer problems prompted a round of panic selling that forced values to plunge.

 

The exchange went offline to beef up its hardware to cope with trading volumes and stem the fall in value. However, soon after trading resumed the site came under a sustained hack attack which saw it bombarded with data. In a tweet, MTGox said the it was being hit by a "stronger than usual" attack

 

 

6.jpg

Bitcoin panic selling halves its value

 

BBC News-11 Apr 2013

The Bitcoin virtual currency lost half its value on Wednesday because of a panic sell-off. From a high of $260 (£169) for each Bitcoin, the value ...

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RECORD ... of a Wild, Wild Ride ... "Stability" - what's that ?

 

(1) 10 days

btc1.png

 

(2) 2 days

btc2.png

 

Even in the last 24 hours, you could have doubled your money from under $60 to $120+

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"HEDGING NEEDED" - therein lies a business opportunity

 

BITCOIN MERCHANTS - How are they reacting to the Sharp price drop?

(When Bitcoin falls):

When prices of BTC falls, there can be a real problem. Suppose Bitcoin falls to $100, and a merchant receives 0.5 BTC, he will get only $50 worth of Bitcoins for his "$100 product." If his cost of production is above that, then he will loses money on every sale. How long can he stay in business losing money? Not long perhaps, so he will have to raise the Bitcoin price of his product fairly quickly, or stop selling in Bitcoins at all.

 

(I wonder which of these actions Bitcoin merchants are takIng.)

 

Most seem to be sticking to it - But I reckon that merchants will be sellers whenever prices rally,

until they have their risk levels down

 

 

Bitcoin fans put brave face on price fall

Bitcoin halved in value on other exchanges after Mt Gox posted a message on its website saying: “Orders will not be accepted for the moment as we need to upgrade our database to accommodate the trading volume.”

 

The question now is whether merchants and Bitcoin users abandon the nascent economy because of the volatility.

 

Jon Matonis, secretary of the Bitcoin Foundation, which guards the open-source software behind the currency, said derivative products and hedging tools will be needed to stabilise the Bitcoin economy and to improve price discovery and the liquidity of exchanges where Bitcoin can be swapped for real-world currency.

 

“The amount that is traded on the various exchanges doesn’t represent a lot of the Bitcoins outstanding,” Mr Matonis said. “Even a 1 Bitcoin trade can move the price.”

 

Jennifer Longson, whose Cups and Cakes Bakery in San Francisco boasted of being the first cupcake shop to accept Bitcoins last October, is sticking by the currency. It represents a tiny proportion of her business - she makes Bitcoin sales at a rate of four a week, usually to “tech-oriented guys in their 20s and 30s” – and she has never cashed in the Bitcoins.

 

“I am definitely still up on the deal,” she said, “but I don’t consider that as part of my income because it is so volatile.”

===

http://www.ft.com/in...l#axzz2QNFKOKyQ

A small share of business - and they get free advertising from it

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Bitcoin prices are still in a Downwards Channel

 

bitcointop.png

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The Reality of Bitcoin Mining : Time to cover costs

 

m-----, 13 April 2013 -

 

Been "mining" BTC for 2 weeks now, have 0.54 BTC out of the "internet ground" running a small mining rig 24/7 in my man cave. Ir draws 200w for 600 m/hsh and means I spent about £8 on electricity, for a £42 return at todays GBP price. Hardware cost £240 for what I needed to add, sofware and set-up time was free. Energy wise it looks like for my first BTC it's going to cost between £15-£20 to get the first whole 1 BTC out as i'm sure another difficultly level will be reached in the next few weeks slowing down extraction.

 

Still If the price holds and I get 3-4 coins out over the next 4-6 months the hardware will be paid for which be a free graphics card upgrade! Funny during the price crash I was mostly concerned would the value drop to less than the cost of electricity to extract, as I haven't actually "bought" any with £££.

 

I find mining them kind of fun, can log on to my pools website while at work and see how the operation is going. I also like the idea of something making money while you sleep.

 

 

/ source

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BITCOIN - WALLET Reviews (2012)

 

Online Wallets

Online wallets are undoubtedly the easiest to setup, and they offer the convenience of being able to access your bitcoins from any computer, although at the cost of requiring a much higher degree of trust in the provider. There are three well known options to choose from among online Bitcoin wallets:

 

Instawallet

(5.0/ 1.0/ 1.0) : (Instawallet.org is CLOSED ! claims being processed)

Ease of use: 5/5

Security: 1/5

Advanced features: 1/5

 

Instawallet is by far the simplest to set up among the online wallets. When you go to instawallet.org, you will be redirected to a page with a randomized URL showing you your wallet, with your Bitcoin address and a “Send” button to make payments. Any bitcoins sent to the address will appear on your balance and by returning to the same URL, you will be able to spend them. The main problem with this service is security...

 

Coinbase

(4.0/ 3.0/ 1.0) : https://coinbase.com

Costs : IN: Free / OUT-to$: 1%+$0.15

 

Coinbase is a step up from Instawallet in terms of both complexity and security, although as a wallet, it is still fairly basic, with only standard sending and receiving functionality. Nevertheless, Coinbase has two features which make it a very convenient wallet for the beginning user. First of all, the wallet allows you to avoid dealing with Bitcoin addresses entirely and instead send directly to an email address... Second, Coinbase includes its own built-in exchange...

 

WalletBit

(4.0/ 2.5/ 1.0) : https://walletbit.com/

 

Like Coinbase, WalletBit attempts to create an online wallet that is easy to use, with all of the convenience features that beginning users need. WalletBit allows sending to email addresses much like Coinbase, as well as a built-in conversion to and from the user’s local currency through the Bitcoin exchanges Bitcoin Nordic and MtGox. These options are less convenient than Coinbase’s bank account integration, but have much higher deposit and withdraw limits and are available much more widely around the world. WalletBit is also a merchant services provider...

 

Blockchain

(3.0/ 4.0/ 5.0) : https://blockchain.info/wallet/

Cost : Free

 

Blockchain is a hybrid between an online wallet and a desktop client, seeking to offer close to desktop-level security with the convenience of an online application. Unlike the alternatives, Blockchain works by storing your wallet encrypted, and running the code necessary to decrypt your wallet and sign transactions in your browser, so the operators of Blockchain have no way to access your funds. However, there are some security complications...

 

(Click to learn Details, and more about Desktop Clients):

http://bitcoinmagazi...wallet-options/

 

PAYING FOR BITCOINS:

 

The major Bitcoin exchanges don't accept credit cards—because of that whole anonymity problem–so instead, you're encouraged to purchase Bitcoins by adding your bank account information to a site like Coinbase, and transferring money that way. You can also get Bitcoins by using your phone, the virtual program Second Life, wire transfer, or at a cash deposit location like CVS. Bitcoin users caution against PayPal—because it might freeze your account—and say that "buying Bitcoins in person can be fun and safe!" If you want to meet a stranger in 7-11 and give them cash for Bitcoins, here is a website to find a trusted serial killer distributor.

 

In which other countries can you buy Bitcoins? Canada, Mexico, Argentina, Brazil, parts of the European Union, the United Kingdom, Russia and Malaysia, to start. Mother Jones asked Andresen whether you could buy Bitcoins with, say, the Indonesian rupiah, and he said that "I don't know if there is an exchange from Indonesian currency to Bitcoins yet."

===

/more: http://www.motherjon...tcoin-explained

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Post#95 : Saved for 2013 WALLET suggestions

 

(coming)

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I have decided to experiment with one of the Bitcoin Wallets, CoinBase:

Please send 20% of a Coin, or 10% later, if you can spare that

 

I have added a "Pay with Bitcoins" Button

(see the Line a little below the GEI Logo, but off to the Right):

 

+ The suggested Donation is 0.2 Bitcoins

+ This is a temporary experiment - to see how the Bitcoin payment mechanism works

+ I will change the amount to 0.1 Bitcoins in a day or two, and probably leave it there

 

If you have some "spare" Bitcoins that you are willing to Donate to GEI, that would be much appreciated

 

(From the Merchants point of view, getting a BUTTON set up, is a pretty simple process.)

 

They seem to be rather successful:

btctr.png

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FIVE PROFS Comment on Bitcoins : Is "An inevitable Test" underway?

 

xx

 

The best one IMHO was:

 

Peter Rodriguez, currently a Professor at Virginia’s Darden School of Business:

- EXCERPT:

 

In some ways, Bitcoin is just a virtual pack of smokes. But in other ways, it’s revolutionary.

 

Cigarettes have inherent value and alternative uses, like cotton and even gold. Bitcoins are valued in and of themselves. They have even less alternative uses than paper currency or baseball cards. So, if they can establish their worth and hold the confidence of investors long enough, the institutions that can eventually convert Bitcoins from a fad-like store of value to a real currency might just begin to develop. And then, Bitcoins could become a reliable medium of exchange and index value that has some real place in the world. Even it they just serve to measure the value of goods ultimately transacted in ‘real’ currencies, Bitcoins will have become something entirely new: a true, stateless, virtual currency rooted in nothing other than confidence in the set of rules that surround them. It could all implode, of course, and that’s not unlikely. But, currencies are always tested and all of them have gone through existential crises.

 

The real question isn’t whether Bitcoin will falter, plummet or take us all on a crazy ride, it’s whether it will actually survive its inevitable test. If it does, even at very low values, it will change the way we think about stores of value, finance and the independence of the virtual economy.

 

===

/more: http://techcrunch.com/2013/04/14/iterations-how-five-real-economists-think-about-bitcoins-future/

 

Bitcoin Question / Why do people keep missing this key point ?:

 

Will Merchants stick with it, continuing to price their goods in Bitcoins, through a

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It had all the hallmarks of a ridiculous bubble. The big winner here is Butterly labs that produce the mining machines, they were selling for thousands, and I believe they sold tens of thousands of them on preorder. They haven't even built most of them yet.

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It had all the hallmarks of a ridiculous bubble. The big winner here is Butterly labs that produce the mining machines, they were selling for thousands, and I believe they sold tens of thousands of them on preorder. They haven't even built most of them yet.

 

Orders will get cancelled, and they will wind up getting paid for nothing.

 

Bitcoins touched $50 in recent hours - and the $40 Target mentioned by some here* is now within sight

 

bitcoint2.png

 

*myself included

 

 

A guy is claiming so have sold his $40,000 porsche for 300 bitcoins yesterday, I think it's genuine as well;

 

... Bitcoin is here to stay! (haha)

 

wADS7Un.jpg

 

Only 8200 miles and in impeccable condition!"

 

:lol: :lol: :lol:

 

 

I wonder how this guy is getting on with his bitcoins now?

300 BTC x $50 = $15,000

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Don't know why, but I'm only just visiting this story, faint recollection of thinking pyramid selling in the past, but curiosity has made me look around and what strikes me most, is quite a few were warning of this some time ago.

 

Saw this thread on M.S.E for instance http://forums.moneys...d.php?t=3473961

 

Then I read comments like these below on other blogs and I wonder how much some people may have won and lost?

 

The MSE crowd strike me as too tight to fall for a ramp such as bitcoin! However the trouble is we live in a world where making a profit is often equated to being clever and being correct. If you warn against a rising market you are fighting the tide and will therefore have the impression of being wrong. Too many people forget to distinguish between being right (ie sometimes by luck or taking undue risk), being clever and making a profit (which may have been made by luck or taking undue risk).

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