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The Almighty Buck Businesses

Bitcoin Is Crashing (businessinsider.com) 296

Posted by msmash from the what's-happening dept.
An anonymous reader writes: Bitcoin is getting smashed. The cryptocurrency was down 18% to about $892 per coin as of 8:17 a.m. ET on Thursday. It is the biggest drop in two years. Earlier this week, on its first trading day of the new year, Bitcoin crossed above the $1,000 mark for the first time since 2013, but it has now tumbled below that level.
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Bitcoin Is Crashing More

Bitcoin Is Crashing

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  • Previous article (Score:5, Insightful)

    by buchner.johannes ( 1139593 ) on Thursday January 05, 2017 @10:09AM (#53609865) Homepage Journal

    https://news.slashdot.org/stor... [slashdot.org]
    Probably a lot of people took the news of a 1000$ high as a chance to sell now?

    • Re:Previous article (Score:5, Insightful)

      by aaarrrgggh ( 9205 ) on Thursday January 05, 2017 @10:17AM (#53609925)
      More like a pump and dump scheme I would guess.

      • Re: (Score:3, Informative)

        by buchner.johannes ( 1139593 )

        Both articles actually state that Bitcoin strongly anti correlates with the yuan.

        • Re:Previous article (Score:4, Interesting)

          by HornWumpus ( 783565 ) on Thursday January 05, 2017 @01:06PM (#53611219)

          China is in a huge bubble, smart Chinese are desperate to get their capital out. Capital controls never work for long.

          The 'ghost cities' in China are all owned by Chinese citizens, who traditionally love to own * real estate. In China a condo that has never been occupied is worth more that a condo that has (strange, but somewhat understandable as rents are nowhere close to mortgage payments). The average person with money in China is sitting on assets that are overvalued by a factor of at least 5. As more and more of them realize this, bitcoin pricing will become more volatile. The 'grey market international cash flow' share of bitcoin ownership (think of it as a flux though) is increasing vs the 'investor/speculator' shares.

          * 70 year lease, own...

    • Re: (Score:3, Insightful)

      by houstonbofh ( 602064 )
      And the second it dropped below $900, people started buying and pushed it to $975... Look up "Profit Taking" "Rebound" and "Correction" to see why this happens and how it happens in stocks and other investments all the time. Essentially, a lot of people had sell orders at $1100 that started a dip. A lot of day traders dumped when it dipped causing a big drop. But a lot had buy orders if it went below $900, and that floor caused the day traders to jump in and push it up further.

      • I think this is closer to the truth. It wasn't people saying "hey, the news says bitcoin is high, I should sell". It was people setting up automated buy and sell orders based on specific value amounts. The problem was that everyone seems to have picked the exact same numbers.

      • And the second it dropped below $900, people started buying and pushed it to $975... Look up "Profit Taking" "Rebound" and "Correction" to see why this happens and how it happens in stocks and other investments all the time. Essentially, a lot of people had sell orders at $1100 that started a dip. A lot of day traders dumped when it dipped causing a big drop. But a lot had buy orders if it went below $900, and that floor caused the day traders to jump in and push it up further.

        When I first glanced at the headline I thought there was something major going on, since if Slashdot were reporting on bitcoin value it must be serious. Nope, of course not, just a correction that was bound to come sooner than later. It's still going strong, and while it will continue to be a wild ride, I can't see it really "crashing" any time soon, no matter what the OP suggests. I got back in months ago at $800ish, took profit at $975, and rebought again at $890. Big swings, as we've always seen, but not

    • Probably a lot of people took the news of a 1000$ high as a chance to sell now?

      or the many ransomware owners changed their BC to $$..

  • Bitcoin is a great way to make a lot of money or lose a lot of money if you don't mind taking a gamble or being very patient. It will inevitably rise and fall like crazy.

    • Bitcoin is a great way to make a lot of money or lose a lot of money if you don't mind taking a gamble or being very patient. It will inevitably rise and fall like crazy.

      One of the reasons that Bitcoin is (supposedly) Good is the stability in its supply, that it can't be diluted by evil government and made valueless. But since nobody is looking after it, it is vulnerable to horrible fluxations way worse than anything than properly managed fiat currency does. Bitcoin as a means of transfer, fine, but Bitcoin as a value store, terrrrriiible.

      • Good is the stability in its supply, that it can't be diluted by evil government and made valueless.

        Lol, I wouldn't bet on that. I may not be able to articulate how they could do it, but I would also never claim that it's immune to them finding a way to fiddle with the value of bitcoin.

    • Only if you look at it in very short terms. Over long term it is actually quite stable other then occasional speculative peaks which are easy to avoid. You could see this one coming at Christmas. And today (If you were watching) was the bitcoin sale at $900.

      • Only if you look at it in very short terms. Over long term it is actually quite stable other then occasional speculative peaks which are easy to avoid. You could see this one coming at Christmas. And today (If you were watching) was the bitcoin sale at $900.

        For pretend money, Bitcoin is not so unstable. Compared to real money, it is extremely unstable. It is only ideological blinkers that prevent people from seeing it that way.

  • Rebounding already (Score:3)

    by jdavidb ( 449077 ) on Thursday January 05, 2017 @10:16AM (#53609913) Homepage Journal

    $950 as of this comment. These articles are always out of date.

  • Maybe just profit taking? (Score:5, Insightful)

    by DigitalSorceress ( 156609 ) on Thursday January 05, 2017 @10:17AM (#53609919)

    I really think that a lot of folks had just said "oh 1k maybe time to "cash in"...

    I bet it rebounds and will go through some oscillations every time it crosses 1k until folks get used to the idea that it can go to /higher than 1k then it will creep up and probably take a dip at 1.5k and/or 2k

    • I bet it rebounds and will go through some oscillations every time it crosses 1k until folks get used to the idea that it can go to /higher than 1k then it will creep up and probably take a dip at 1.5k and/or 2k

      The way to bet is to buy some :)

    • Re: (Score:2)

      by mccalli ( 323026 )
      It always amused me that the first thing this brave new world of decentralised control recreated was....currency and commodity speculation. They're being introduced to the idea of support and resistance levels, all standard stuff. The difference with crypto is that the volatility resulting from these swings is enormous.

      • The difference with crypto is that the volatility resulting from these swings is enormous.

        That's not a "crypto" difference; it's a normal characteristic of commodities that typically trade in low volumes. If bitcoins were being bought and sold in large quantities by many big institutional investors, with lots of focus on identifying and exploiting arbitrage opportunities, the volatility would be reduced.

        • That is only going to change when a big (evil) bank with cozy connections to all those big bad gov'ts decide to weigh in and help Bitcoin succeed. So far, one of the surest ways to lose you Bitcoin is to trust it to a Bitcoin exchange, where it will likely disappear with all the earmarks of an inside job. Mtgox is the obvious example, but it was far from the first and not the last.

          • Why would any bank want Bitcoin to succeed? They would rather their own digital currency come out and take off.

    • Re: (Score:3)

      by vvaduva ( 859950 )

      This is the most likely scenario. The market is a beautiful thing...probably several big whales decided to cash out, meaning the supply spiked causing the price to go down. The ignorance of looking at a 24 hour 17% drop vs a 300% 12 month raise is astounding. I would think most people who understand financial markets would not be this ignorant to call this a "crash"

      • Re:Maybe just profit taking? (Score:4, Insightful)

        by AthanasiusKircher ( 1333179 ) on Thursday January 05, 2017 @11:18AM (#53610385)

        The ignorance of looking at a 24 hour 17% drop vs a 300% 12 month raise is astounding. I would think most people who understand financial markets would not be this ignorant to call this a "crash"

        For someone accusing others of being "ignorant" of financial markets, you sure have a funny way of reporting statistics. You do realize that IF you had a 300% gain, then a 75% loss would completely erase it, right? When talking about percentage gains this large, it usually helps to talk in terms of actual numerical gains or at least how much of a loss you have COMPARED TO the gain (in real numbers).

        According to the first search hit I found, a year ago Bitcoin was at around $432. Yesterday, that site reported it as $1135. That's a 162% gain, not 300%. As I write this, Bitcoin is around $950. That's is indeed somewhere around a 16-17% loss in 24 hours.

        But, from a clearer perspective on how we relate those two percentages, the gain for the past year was about $700. The overnight loss is so far around $185. In other words, Bitcoin lost OVER A QUARTER OF ITS YEARLY GAIN OVERNIGHT.

        Is it back where it was a year ago? No. But trying to pretend that this is a minimal loss by juxtaposing numbers like 300 and 17 is disingenuous at best.

        Should "people who understand financial markets" be worried at such a turn of events? Probably not. Because people who understand financial markets know that Bitcoin is right now a really bizarre investment subject to the whims of "pump and dump" investors, and there's still a lot of value locked up in some early investors who could completely crash the market if they decided to jump ship.

        So, anyone "who understands financial markets" probably expects Bitcoin to be this volatile -- probably even more so. Whether a person "who understands financial markets" would consider Bitcoin a sound investment is a different question.

      • Re: (Score:2)

        by jeremyp ( 130771 )

        Unless it drops further, I think I would classify the high point as a spike. Bitcoin is currently trading at about the same level it was two weeks ago.

        Last time Bitcoin was at $1,000, it eventually crashed to around $200, but that was precipitated by the implosion of MtGox and a couple of other high profile failures.

  • Bitcoin is dead (Score:5, Insightful)

    by vvaduva ( 859950 ) on Thursday January 05, 2017 @10:26AM (#53609977)

    This is it...Bitoin is dead!! It's up 300% over the last 12 months but down 18% over the last 24 hours. It's fucked! Bitcoin is dead!! What idiots use this crap??

    • Re: (Score:2)

      by JcMorin ( 930466 )
      It's called volatility, bitcoin is used for buying something real every 35 sec just on BitPay platform.

      • Re: (Score:3)

        by vvaduva ( 859950 )

        Yeah...I use my Shift Coinbase card all the time to buy dinner, pay bills or whatever I feel like using it for. I don't understand the ignorance people here display towards BTC.

        • Thanks for your post, I had not heard of the Shift Coinbase card before. What advantages do you feel it has over a typical Visa?

  • OMG back to $929!!! (Score:2, Insightful)

    by Anonymous Coward

    This is not news. If I wanted to know what the BTC value is I'd not check on /.

  • Buy it to speculate (ie gamble).

    • Re: (Score:3)

      by grnbrg ( 140964 )

      All investment is a gamble. And with Bitcoin, like any other investment -- don't risk more than you are prepared to lose completely.

      • Re:Don't buy bitcoin for an investment. (Score:4, Insightful)

        by lgw ( 121541 ) on Thursday January 05, 2017 @03:06PM (#53612123) Journal

        All investment is risk, but that's different from what people normally mean by gamble. Sure any investment bears risks such as global nuclear war, government/societal collapse, alien invasion, and so on, but the unexpected death of the investor is a higher risk than those sorts of things. Any investment is a risk somewhere on the scale between short-term US treasuries, and loaning money to a heroin addict, but that doesn't mean all risks are similar.

        Also, volatility and risk are different things. At this point for BTC, I'd be much more concerned about its volatility than the risk it would go to 0, making it speculative regardless.

    • Buy it to speculate (ie gamble).

      The problem with Bitcoin as a speculative investment is the lack of liquidity. Unlike other markets it is not easy to buy and sell large amounts at will, in addition there seems to be no put and call options available. As a result, while it is a highly speculative investment it is not an easy one to actually invest in as a speculator; unless you are just doing trivial amounts of money.

    • I'm really kicking myself for not speculating another $10k into BTC when it was down around $225.

  • You might want to at least make a reference as to how other currencies are doing against the dollar, as well as state what time period the 18% drop was over...a day...a month...a year???

    • Re: (Score:2)

      by OzPeter ( 195038 )

      as well as state what time period the 18% drop was over...a day...a month...a year???

      Um I know that this is /. but it's genuinely lame to not have read TFS that only contains 4 sentences and states

      Earlier this week, on its first trading day of the new year, Bitcoin crossed above the $1,000 mark for the first time since 2013, but it has now tumbled below that level.

  • Don't you see what Potter's doing? (Score:4, Interesting)

    by elrous0 ( 869638 ) on Thursday January 05, 2017 @10:31AM (#53610023)

    He isn't selling, he's BUYING!

  • At work I get dollars for labor, which can be used to procure goods and services. I could also use my computer sitting at home to do nothing and save electricity, fold proteins for the good of mankind, or generate numbers that for some reason can be used to procure goods and services? Usually when you get value for no reason it is part of a Ponzi scheme. Does Bitcoin hold any value because it also seems to be a decent way to launder money?

    • At work I get dollars for labor, which can be used to procure goods and services. I could also use my computer sitting at home to do nothing and save electricity, fold proteins for the good of mankind, or generate numbers that for some reason can be used to procure goods and services?

      Instead of welfare, we should just give all the unemployed computers for Bitcoin mining.

      • Instead of welfare, we should just give all the unemployed computers for Bitcoin mining.

        I'll vote for this if said computers are powered by exercise bikes and treadmills.

    • Usually when you get value for no reason it is part of a Ponzi scheme.

      People mine gold and diamonds, despite there the fact that we already have large stockpiles of them.

  • Who cares? (Score:3)

    by rebelwarlock ( 1319465 ) on Thursday January 05, 2017 @10:35AM (#53610049)
    Since when is bitcoin's instability news?

  • Paper currency is too dull (Score:5, Funny)

    by T.E.D. ( 34228 ) on Thursday January 05, 2017 @10:40AM (#53610085)

    You know what traditional currency like the Dollar was really missing? All the excitement of the random wild value fluctuations inherent in a dot-com stock! I for one find it tedious and boring to walk up to the checkout line in a retailer or grocery store already knowing that I have sufficient funds to pay for my purchase. Yawn.

  • Bitcoin is hilarious... (Score:3)

    by MindPrison ( 864299 ) on Thursday January 05, 2017 @10:41AM (#53610095) Journal
    I've always seen bitcoin as I've seen Pirate Bay. Bitcoins biggest selling point afaik was that you could pay anonymously, and anonymous pay is good for the black/dark marked. For the same reason, I can't just walk down to my local bank and say "1$ bitcoin, please!".

    The dilemma starts when you're selling something, and want the money into normal money you can actually pay your utility bills with.

    Also, the bitcoin to me also seem like the "poor man's fake gold reserve", if you believe it is worth something, then it is worth what you pay, so essentially the value of the bitcoin could go fictively up and down all the time, and if you sell it at the right time (if anyone is willing to buy when the value is high), then what do you do with the money? In Sweden you'd have to prove where the money comes from if it is a sum over 10K SEK. Otherwise the bank wont heed it and say no to your money because it doesn't come from any known source to them. They claim this is to prevent drug trafficing, but we (the citizens) know all too well that this is a plot from the gov. to control all the money and tax even already taxed second-hand sales, whatever you sell - we want a cut.

    So all regular citizens really can do - is to lean back and watch the online show called "Bitcoin raises/loses value/dives/jumps" whatever....

    • Re: (Score:3)

      by Dwedit ( 232252 )

      Bitcoin isn't anonymous, everyone can see the full transaction history for your ID number. They just can't go from ID number to Name. But if you do anything like even post a bitcoin link on a web page, then you've provided enough information to find out your transaction history.

  • I get a little board of "Bitcoin is rocketing" or "Bitcoin is crashing" headlines. Niether is true, and never was. Bitcoin is in effect a (virtual) commodity, but with a much lower cap than others such as gold. This means that small things, like Brexit, or the fall of the Chinese Yuan, or the discontinuation of Indian cash bank notes and such will effect the price in a major way, with the inevitable exageration of the market by speculators, followed by the resulting corrections when these minor bubbles b

    • Re: (Score:2)

      by Artemis3 ( 85734 )

      Thats not true either, it will go to zero once quantum computing makes current crypto algorithms obsolete. By then new quantum crypto currency will replace it.

      Give it some decades and always pay attention to the development of quantum computing to take a good guess when to leave. For the short/middle term it should be fine tho.

      • I don't expect quantum computing to make an impact in the next 20 years, even with a gigantic breakthrough. I could be wrong, and I hope I am, but the world record for (proper) quantum factoring is still 21=3*7, right? And that was 2012. The previous record of 15=3*5 had been standing since the 2001. And the interval between advances doesn't seem, to me, to be getting any shorter. To put it another way, the difficulties in scaling the systems to more qubits seem to be increasing at least as fast as we

  • To be expected.

  • Unstable "currency" (Score:3, Interesting)

    by davidwr ( 791652 ) on Thursday January 05, 2017 @11:03AM (#53610257) Homepage Journal

    A useful currency is stable for the time you hold it.

    If you are a merchant that takes bitcoin but sells it for local currency by the end of the day, you need intra-day stability.

    If you are holding it as a currency for days or weeks at a time, you need short-term stability.

    If you are holding it as a currency for longer, you need medium- or long-term stability.

    On the other hand, if you are buying it as an investment, like a stock, or as a speculative "investment" (aka "gambling") then in addition to a long-term upward trend, you want instability so you can benefit from dollar-cost averaging as you buy and "dollar cost averaging in reverse" - selling a fixed amount of BC every day - when you eventually sell.

    Of course, if you are a day trader who depends on intra-day changes in value, you want short-term instability and either a knack for timing the market right or a dose of good luck to keep from coming out in the red that day.

  • World's lowest volume currency has high volatility. Who'd a thunk it?

  • e.g. Ethereum.

    The shady exchanges are the problem with all of the cryptocurrencies. The biggest asset would be a very easy way to facilitate a micropayment via bitcoin; the current exchange mechanisms make this hard or impossible for average folks.

    Ultimately a blockchain (and the resulting currency) will need to be backed by a nation state to have validity. Political notions aside, that's when things will get interesting. If Bitcoin ever gained any traction it will be put down by force.

    Other blockchains pro

    • I'm curious what you think "put down by force" would look like.

      • Re: (Score:2)

        by xtal ( 49134 )

        Raid exchanges. Seize records. Apply tax law to freeze accounts.Pass laws making it illegal to trade in bitcoin. Put a few people in prison for 10 years.

        QED.

        Precedent exists for all these things. Read up on e-Gold.

  • Buy your Bitcoins now, before it crashes further!

  • While there are currency speculators, "investing" in a currency is generally not a sensible thing to do. You don't keep wealth in cash, which produces nothing, you invest it in something productive that yields a return.

    Bitcoin, like money, is a short term means for conducting business transactions, nothing more.

  • My bet is that someone decided to cash out a lot of bitcoins (up to tens of thousands) which swayed the market however it's already recovering - as of this moment bitcoin is trading at $985 at BitMex (the largest USD bitcoin exchange).

    As for the Chinese yuan getting stronger - I call it BS. It hasn't become 10% more valuable, more like 1% at the most, yet bitcoin has suddenly lost ~30% (~1100->~880) of its value in a matter of a an hour(!). Nope. These two events seem to be related but one didn't cause

    • It's been already noted on several occasions that very large bitcoin purchases/sell outs significantly alter bitcoin's price because people still don't believe in it like they for instance trust fiat money, so whenever they see major fluctuations they start to panic and exacerbate whatever trend is currently in effect. This explains almost every time when bitcoin has lost/gain its value.

      Bitcoin is a currency of pure faith (there's no bank/government or any financial entity behind it) and only when a numb

      • Re: (Score:2)

        by hey! ( 33014 )

        Well, it's not a matter of faith one way or the other, it's a matter of control.

        Money is always money because AND ONLY because people have faith in it. That's just as true for dollars as it is for bitcoins. The difference is that bitcoins are designed to have no central authority. This is a huge advantage for people who have reason to distrust central authorities (e.g. people trading in contraband, people who trust authorities per se).

        On the other hand, not having a central authority means there is nobody

  • yawn. ;-)

  • It just occurred to me that /. just got used in a pump & dump scheme. Penny market emails that go out all the time --- "this stock is a big mover"... blah blah.

    "hey look BTC is down" Was that supposed to evoke sells or buys - I'll never know. But advertising on /. is now free !!!

    • but that email was true, it made a "YUGE!" move, downward. Also, not a penny of money was lost, for every person that made money there was someone that lost money. zero sum game.

  • RIght now the main things fueling BitCoin's value is India's deflation currency correction and worries about Trump's administration. Within the year I look for both issues to stabilize. BitCoin will drop down around $350 / coin.

  • 1st Million coins (Score:4, Insightful)

    by Holi ( 250190 ) on Thursday January 05, 2017 @12:48PM (#53611055)
    As long as Satoshi still controls the first million bitcoins I fear it cannot be taken seriously as the creator has the power to single handily effect the market. No bank or government is going to back something where 1 individual has set themselves up with such disruptive power.

  • And /. contributed to the scam with its last article on BitCoin. Stupid.

  • Inverse relationship to Yuan (Score:5, Insightful)

    by NotARealUser ( 4083383 ) on Thursday January 05, 2017 @02:50PM (#53611995)

    Welcome to currency trading. The reason your grandparents did not bet the farm on currency is because of the wild swings. Somebody gains big and somebody loses big here. These sort of swings in currency are exactly how George Soros made his fortunes. I do not think the current swing indicates good or bad days ahead for BitCoin. It only indicates that it is being used for huge profits by some.

    Here is a little explanation of what just happened:
    One of the biggest emerging Bitcoin markets is in China. China's Yuan has been weak and even a small percentage of investors moving their Yuan investments in and out of Bitcoin can cause the market to fluctuate greatly. China's Yuan is much bigger than Bitcoin, so relatively small waves in China really rock the boats in the Bitcoin world. There was a spike in Yuan value, and some investors assumed better days ahead for China and cashed out bitcoins for Yuan. As you can see from the current charts, investors now saw cheap Bitcoin and are buying those again.

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