Bitcoin's Value Plummeted Overnight and No One Knows Why (slate.com) 461
Jacob Brogan, writing for Slate: While the Western Hemisphere slept, Bitcoin plummeted. Just after midnight Eastern Time on Friday, the cryptocurrency was valued at a little over $15,000, on the digital currency exchange Coinbase. At that point, it was already well below the $19,783 all-time high it had hit the week before. Over the course of the night, Bitcoin began to decline erratically, occasionally spiking but following a general downward trend. Around 9:22 a.m. Eastern, it hit a temporary floor, valued at a mere $10,400. By that point, it had declined more than $6,000 from its short-term peak the morning before, having lost more than one-third of its value. Bitcoin wasn't the only currency hit by a sharp drop. Tech Crunch's Jon Russell reports that most other prominent cryptocurrencies also fell, including Ethereum, Litecoin, and Bitcoin Cash (which is, confusingly, separate from Bitcoin proper). As Russell notes, it's hard to say why this is happening, "in the same way that nobody knows exactly why bitcoin's price has [shot] up from a touch under $1,000 at the start of the year."
it is known why (Score:5, Informative)
It was overvalued and a bubble. Next question?
Re:it is known why (Score:4, Interesting)
Re: (Score:3, Insightful)
It's not night everywhere.
Re: (Score:3)
Re: (Score:3)
Except the author in the story got his timeframe entirely wrong.I went to bed shortly after midnight US eastern time, and by then, I had been watching the crash happen for the last 4 or 5 hours. On the west coast, it would have begun about 4 or 5 PM. It started around $16k, and by the time I went to bed, it had already fallen into $13k range, and then bounced back up into the $14s. Sometime later it continued falling again. Looking at the charts, as far as I can tell it only fell to a bit below $12k, not $1
Alternate Theory (Score:3, Insightful)
Smart money manipulating Bitcoin so it can buy in.
Re:Alternate Theory (Score:5, Funny)
Buy on the dip people! A top economist forecasts one Bitcoin will be worth one hundred million trillion dollars in three months time!
Re:Alternate Theory (Score:5, Insightful)
Spend only what you can afford to lose. Up until now, the trend has been increasing value, and it will likely continue for a while. At some point, it will crash, and it will be difficult to cash out then.
Re: (Score:3)
Because nobody knows when the crash will come, and shorting stuff is dangerous. Unless you can hedge your bet, you can lose an unlimited amount of money shorting.
Re:Alternate Theory (Score:4, Insightful)
You seem very angry that people are identifying this bubble as a bubble, without being able to predict when it will burst.
I put my money where my mouth is - not by shorting bitcoin, but by refusing to risk my principle by investing in the first place.
If I didn't think it was a bubble I'd buy.
Re: (Score:3)
Your article should be called 5 ways to "short" bitcoin, as only the last one is actually shorting. The other 4 are not actual shorting. The first one isn't even remotely close to shorting. Margin trading is just trading where your funds are backed by a loan. I'm not even remotely sure why it's in that list, as you profit when the stock goes up. The ones that do resemble shorting (from the aspect that you can profit when the price drops) are also very risky because you have to know the precise timeframe in
Re:Alternate Theory (Score:4, Funny)
Smart money manipulating Bitcoin so it can buy in.
Yep. Google "How to short b..." and several explanations will just pop right up!
Re:it is known why (Score:5, Insightful)
Re: (Score:2)
Re: (Score:3)
Funny, Binance CEO Changpeng Zhao is based in Hong Kong [bitcoin.com] as is Binance and he's talking in this interview about post-Beijing ban of cryptocurrencies. Hong Kong is NOT China. Now, I know to most ignorant Westerners like you, China/Hong Kong/Taiwan/South Korea/Thailand is all "Asia" and all "China", but the reality is that Hong Kong is NOT China. Hong Kong has its own laws, legal system, passports, visas, currency, language (Cantonese - not officially supported in China), and they even drive on the wrong s
Re: (Score:3)
Rapid trading needs a miner insider (Score:5, Interesting)
Selling a lot of BTC, quickly, and more importantly reliably, needs the cooperation of bitcoin miners to process your transaction quickly, ahead of others, instead of waiting until... whenever.
So, look who processed all those BTC sale transactions and how they are connected with the sellers.
Clearly, BTC trading benefits from insiders because it is so illiquid.
Re: (Score:2)
Hmm, if only Bitcoin had a transparent way of getting your transactions priority increased without needing to collude with miners.
Those Bitcoin miners are connected to the sellers by virtue of taking a fee to process transactions and those offering the highest fee get [preference for inclusion in a block.
Re: (Score:3)
Re: (Score:3)
People convert their savings into Bitcoins when their local currency is unstable. Then they convert it back again once things settle down.
Right.... because Bitcoin is far more stable.
Re:it is known why (Score:5, Insightful)
Using bitcoin as currency is about the same as using traditional stocks as currency.
I really think bitcoin has no real value outside of providing temporary peaks and valleys to trade between. Using an unstable commodity as a measure of trade-worth is far more complex for businesses to adopt at scale, which pretty much relegates it to the small guy looking to move small amounts of currency discreetly.
I can't imagine this will ever go mainstream at scale unless the value can be made consistent.
Re:it is known why (Score:5, Interesting)
This will never go mainstream at scale as long as the underlying transactions are so fabulously expensive. I read a recent analysis that actual blockchain verified trades can cost as much as $20 to execute (when accounting for the capital and power costs of all the people involved in competing for the initial hash solution).
Even if a trade only costs $0.20, that's still too high to compete with the likes of Visa and MasterCard - at scale, and the 2.75%+ that CC companies charge is going to have to creep into mainstream cybercurrency transaction schemes as well to cover practical costs of fraud, customer service and investor dividends in the real world.
Re:it is known why (Score:4, Insightful)
The solution is to bundle large amounts of transactions together using the Lightning Network, and then intermittently settle them on the main chain. This is being worked on. First test runs have been successful.
Re: (Score:2)
verified trades can cost as much as $20 to execute ... that's still too high to compete with the likes of Visa and MasterCard
The Mastercard fee on a transaction of last week's BC price of $19K would be a LOT more than $20.
Re: (Score:3)
Traditional stocks are coupled to actual assets (and debts) as well as speculation on the total value of the company. In some cases dismantling a company for its assets produces value.
Some companies have been rolled up because their owned real estate was worth more than the value of operating the company.
Re: (Score:2)
As I understand it, Bitcoin's only real utility is as way to transfer value with minimum accountability. Handy if you perhaps have a pallet or two of currency that you can't explain to the taxman and you want to convert it into tangibles like a Ferrari, a trophy wife, and a yacht. You buy Bitcoin in your country of residence (how?), cash it out in some handy excuse for a country where taxes are nonexistent and the mordida is light and go on your way. But there are probably lots of ways to do that that do
Re:it is known why (Score:4, Interesting)
I used to work for a (thinly) publicly traded penny-stock company, every year near Christmas its value would tank, usually to around 30-50% of where it was in the October-November time frame. What it was mostly attributed to was people reviewing their portfolio at the end of the year and selling their holdings for "whatever the market will pay," which is what drives the price down initially - then a little bit of panic selling follows that. I think some people do it to book their loss (or gain) before the tax year ends.
Re: (Score:2)
Wait a second, are you saying a thinly traded penny stock was a going concern? I call bullshit.
Re: (Score:2)
If this comment had been modded "funny" I'd have understood the fellow /.'ers. Too bad Bitcoin's bubble has been busted [twimg.com] at least a dozen times already and it's still ... alive and kicking.
The sentiment for the bubble here at slashdot has never ceased to amaze me. I wonder what you'd have said in the early days of the Internet and dot com's. Both surely seemed to be a bubble. Both have prevailed though a lot of companies didn't make it. But before you compare dot com's to Bitcoin, remember that it started
Re: (Score:2)
yes those are bubbles, just as tech market has had them. do you have a point? my point stands, bubble and overvalued. It is also has become a pyramid scam because of its inadequate architecture
the internet is a collection of technologies not a market. I was on the internet when it was called "ARPANET" decades ago and there were no markets based on it
Re: (Score:3)
Oh you mean like Theranos ?
Homejoy ?
Quirky ?
MySpace ?
Re: (Score:2)
Still way more than it was a month ago. Hardly a bubble.
Re: (Score:2)
day ain't over yet
Re:it is known why (Score:5, Funny)
Up and up the bitcoin goes,
beats dollar and the rouble.
All at once it drops like shit -
Pop goes the bouble!
Pork Bellies (Score:4, Insightful)
Bitcoin is no different than Pork Bellies.
Except it makes lousy bacon.
Re:Pork Bellies (Score:5, Informative)
Bitcoin is no different than Pork Bellies.
Except it makes lousy bacon.
It is very different than pork bellies.
Pork bellies have an intrinsic value. It's food. You can eat it. That gives it a value. Bitcoins, not so much.
I heard an economist during the housing bubble point out that you could rent a house for substantially less than it would cost to buy it. He said we were in real trouble, and he was dead on. The rent value was the real value - the value that reflected its actual value.
Most of us will always pay five bucks for a pack of bacon. So that's its floor as a commodity value. Bitcoin has none.
Some could argue the dollar also has none, but that's another discussion.
Re: (Score:2)
Re:Pork Bellies (Score:4, Insightful)
> I'll be long on USD...
Going long on something designed to lose value is slightly dumber than just burning your possessions in a great big bonfire. The USD is designed to prevent people from going long on it by punishing that behavior. Keynesian economics values spending so much that it discourages savings.
Re: (Score:3)
Bitcoin has some intrinsic value, though, so long as the blockchain is maintained. What follows isn't an example I came up with; it's an example that I once read, and found intriguing at its very least.
Bitcoin has no intrinsic value whatsoever. All that a bitcoin is is evidence that someone wasted a large amount of electric power to mine it. If any western country should get a green government, they might change their laws to put anyone owning bitcoins into jail.
Re:Pork Bellies (Score:4, Funny)
BITCOIN sandwich . Bacon, Italian dressing, Tomato, Cheese, OniON
Tangible asset has intrinsic value and you feel good after it's gone
Profit taking (Score:5, Insightful)
Re:Profit taking (Score:4, Funny)
Re:Profit taking (Score:5, Interesting)
I agree, it's profit taking.
It's like how investors pulled $14.5 billion out of the market [cnbc.com] this week.
Valuating bullshit (Score:2, Interesting)
You're trying to understand why a valuation based on bullshit...plummeted?
Please tell me common fucking sense still has value today...
Re: (Score:2)
I'm really hoping that the OP was being sarcastic. Anyone with half a brain or some investing experience knows what a pump and dump scam is when they see it.
Everyone Knows Why, Silly! (Score:5, Insightful)
Everyone knows why Bitcoin's value plummeted. It's because Bitcoin doesn't have any value other than the belief of people in Bitcoin. What I said about Bitcoin is generally true for the Dollar too, but in the case of the Dollar at least the U.S. Government will take it for your tax payments. Nobody has to take Bitcoin for anything.
People confuse creation of money with creation of value. Value is food, materials, information, useful work. Dollars/bitcoins are unreliable media for exchange of value, not the value itself. Creation of $300B in bitcoin won't help the world to feed one more mouth.
Speculators jumped on it as a get-rich-quick scheme to make money from other speculators who would - they hoped - not time the market as well as they did. But inherent in this strategy is that all speculators will cash in on their speculation, driving Bitcoin back to low values as they abscond.
Re: (Score:2)
Value is food, materials, information, useful work.
Wait... Finding all of those low-valued hashes wasn't useful work?
I'm crestfallen.
Re: (Score:2)
Re: (Score:3)
That doesn't mean the dollar can't crash. I don't think the fact that the US government accepts USD for tax purposes has any effect on the dollar in the short term. If the dollar crashed to 1% of what it was tomorrow, it would mean that I could pay 1% of the taxes I would otherwise have had to in terms of value. I wouldn't necessarily be happy about this if I had a bunch of money in a bank account, but most of my money goes towards child care home improvements, and a mortgage.
In the long term, it would me
Re: (Score:3)
Generally, on a mass-produced board, it is real gold. But only on permanently exposed connectors, like the fingers for the PCI-e socket, and in an extremely thin layer. Literally nanograms of gold per board. If the board is going immediately to population and soldering, they won't bother doing that to the device pads.
Some small-run boards are done with ENIG too. OSH Park [oshpark.com], for example, does Electroless Nickel Immersion Gold with purple solder masks. Looks fantastic and has a long shelf life.
Gold is stil
This isn't a crash (Score:2, Interesting)
When Bitcoin crashes properly it'll lose 90 to 100%+ of it's value.
Bagholders, start selling! (Score:5, Interesting)
There's no "reason" because there's no rational valuation mechanism. Cryptocurrency without a mechanism for value stabilization is a scam. Blockchains are clearly useful for certain kinds of distributed trust problems, but Bitcoin is merely one instance that was always marketed as a cryptocurrency but has zero use as a transaction mechanism. Nobody wants to use a currency that may be worth 20% more, or 20% less the next day.
The only valid use case for Bitcoin I've heard described is as an improved version of the offshore banking system. In other words, a mechanism for rich people to launder and hide money. Of course, a cryptocurrency with value stability would sure as hell be a lot more useful and trusted for even this grey market purpose.
Ultimately, Bitcoin's value is driven by grey and black market activity. Money laundering, cybercrime, etc. Investing in Bitcoin is essentially investing in a residual claim on this underbelly of the economy, in the same way that regular fiat currencies are residual claims on national economies, with a healthy dose of mindless speculation and bubblemania thrown into the mix.
Re: (Score:3)
Nobody wants to use a currency that may be worth 20% more, or 20% less the next day.
If nobody wants it, the price will settle down.
Re:Bagholders, start selling! (Score:5, Interesting)
What I said was nobody wants to use it as currency. There are plenty of people who want to buy it and sell it as speculators. They are just betting that there is a greater fool down the road.
Equities actually represent a claim to a potential future income stream. Some may be very boring and predictable, some may be super speculative and risky - but there is some meaning to them.
Gold and oil have value as commodities because there are alternative uses of these commodities. So yeah, there is plenty of speculation, but you can take gold or oil and "do stuff" with it.
Bitcoin is an investment asset without any meaning sincere there is still no alternate use. Currency use has vanished to near zero while speculation, hoarding, and cybercrime make up essentially all of the transactions.
Welcome to my country... (Score:4, Insightful)
Inhabitants of many Latin American countries have clear memories of the country's currency plummetting overnight to ~60% of its previous value. In my lifetime, it has happened at least three times (and losing 10% overnight? Oh, too many to count).
Of course, nobody wants to save in national currencies then... But it's not like we have much of a choice!
Its not that hard... (Score:2)
There was excitement that 2 major mainstream exchanges were going to start trading Bitcoin futures. That suddenly was going to give Bitcoin legitimacy and credibility. Its the best thing since sliced bread. Everyone jumped on board and it rocketed. Now that the futures have started trading, people are looking around and seeing that the world is still the same.
Sell the news.. back down it goes...
There was a little drop after the CBOE started trading futures because of "sell the news" but it was tempered
Re:Its not that hard... (Score:4, Interesting)
Futures. And options. Particularly the ability to sell short without a position in the underlying asset (naked shorts [wikipedia.org]).
Options allow an investor to effectively buy an insurance policy on the movement of an asset's price. A short position is a bet that your asset will go down. You cover yourself against the losses. Like buying insurance on your house. But if you don't own the underlying asset (or didn't borrow it), it's like your neighbor buying insurance on your house. If enough of your neighbors do this, I'll guarantee that your house will burn down sooner or later. It's what happened to mortgage backed securities in 2008.
The SEC tried to put a stop to that. But given a brand new asset class that they really don't understand or can't track, expect antics to ensue. Once the shit stops hitting the fan, expect the SEC to move to register and regulate Bitcoin and it's trading. And then it's allure will be gone.
Re: (Score:2)
Noise (Score:2)
The same thing can be said for day trading in individual shares, options, et cetera. What determines the price of a share, if there isn't any news? Noise. They're trading on noise. And now there's suddenly a trend, and most follow it.
The reason is pretty clear to me (Score:5, Funny)
I Am Going To Blockchain (Score:5, Funny)
Re:I Am Going To Blockchain (Score:5, Funny)
Be sure to dockerize it :)
Re: (Score:3)
Bullshit (Score:3)
Bingo !
Transaction speed (Score:2)
Bitcoins take like a week to transfer, right? What price do you get when you sell one, the price at the time the transaction starts, or the time it completes?
Re: (Score:2)
When the transaction is closed. I hope you didn't buy in, that is a very basic business question. Please educate yourself before diving into anything.
Re: (Score:3)
You trade on an exchange, and those trades are done off-chain, i.e. instantaneously.
And if you trade person-to-person, then you just negotiate a price and time, like for any other product you want to trade.
Before anyone asks... (Score:3)
The only reason it didn't plummet further is because of how long these transactions will take to process. Everyone's waiting to see where it all settles.
Very few control most of the system (Score:2)
Actually there's been articles that suggest something like 40% of all bitcoins are held by a small rich crowd of about 1000 users who have more money than common sense and they tend to move simultaneously. So maybe that small rich group is attempting to cash in by selling all at once at the cost of everyone else.
Re: (Score:2)
40% of all bitcoins are held by a small rich crowd of about 1000 users
The reason is that they've held on to those coins since the beginning. These people aren't trading, and they are not panicking.
maybe that small rich group is attempting to cash in by selling all at once
Why would anyone cash in while prices are falling, let alone all at the same time ?
Re: (Score:2)
Out of fear that the price will fall below the basis they bought in at and won't rise again, IE crash.
CoinBase? (Score:2)
Why? (Score:3)
"in the same way that nobody knows exactly why bitcoin's price has [shot] up from a touch under $1,000 at the start of the year."
He doesn't know, he's ignorant. The reason it's shot up is because wall street banks started marketing bitcoin to their customers, and now every two-bit 'investor' wants a piece of the action. It's entirely because of marketing, that's why the price went up.
It will go up more because there is still so much hype around it, and the hype is growing. If the price drops, people will say, "This is an ideal time to get in."
In the investing nomenclature .... (Score:2, Funny)
I'ts known as a Pump-n-Dump.
a lot like what I did to your mom....
Should be pretty easy to find out why (Score:2)
So, it went down and no one knows why, and also they're saying no one knows why it went up. I think that if anyone really wants to know why, it's very easy to solve this.
Find someone who bought Bitcoin, and ask them.
For example, if you want to find out why it went down, find someone who was paying $15,000 per BTC, and ask "why were you longer willing to pay $15k? What new information came to light that made you realize it was worth only $10k (but still a fuck-ton more than $1k)?" and then just see what they
It was because of Slashdot (Score:5, Funny)
Bitcoin up over 50% over the last month. (Score:2)
*Yawn* this is just Bitcoin being Bitcoin.
Buy what you can afford to lose (Slot Machine/Cigarette/Beer money); then don't look at it for at least a month.
Rather than buying bitcoins... (Score:2)
It is well worth the cost, and - if you understand the logic behind financial bubbles - you will spare plenty of your money in the future.
Because it has NO value? (Score:2)
Bitcoin, like everything else, is worth whatever someone will pay for it. Since the recent nuttiness surrounding it means that it's effectively ONLY useful for speculation, what did people EXPECT was going to happen?
The Greater Fool theory only goes so far - eventually you run out of Greater Fools and the price goes back down.
It's REALLY not complicated, folks. Trying to ascribe meaning to this kind of shit is no more sensible than planning your year based on goat entrails.
BTC Futures will turn BTC into Fiat Money's slave (Score:5, Informative)
There is something you guys should understand about Wall Street (particularly Goldman Sachs a.k.a. The Vampire Squid) getting into the cryptocurrency futures market. You would think on the surface, if you write (or go short) a Gold, or Oil, or even Cattle contract, that you have to come up with the goods when the futures contract matures. However, there is the little discussed option of "Cash Settlement". If you can't meet the obligations of the futures contract, you can simply pay the owner of the contract what those goods are worth in US Dollars. The markets tout this as good thing for all market participants, but in reality, it is a gross perversion of the market in general. It effectively turns your Cattle, or Oil, or Gold market into a US Dollar market.
And now they're doing the very same thing to the BTC market. When people are short BTC futures and have to come up with the goods, they don't have to worry about spiking the spot market looking for BTC. They just have to shell out USD. And the Powers That Be have LOTS of USD to spend on either side of that trade.
Maybe Short Selling? (Score:5, Informative)
Imagine you think that Bitcoin is in a bubble and hugely over-priced. All it would take would be a sharp pin to burst the bubble and the price will plummet... Well, good for you if you don't have any in your portfolio, but how can you use that to make a shed-load of money?
You sell short in the hope of starting a run. Here's how it works. You go to the market and you sell say, $100,000,000 of Bitcoin that you don't actually possess... Markets will allow you to do this, as long as you settle all your accounts by the end of the current trading period [i.e. by market close on the day]. So what happens is this:
You have no cash to buy, and no Bitcoins, but you "sell", $100,000,000 of coins in to the market at say 20% below the currently trading price. Let's keep the numbers simple - imagine the prevailing price was $20,000/coin and you sell for, ooh... $16,000, which is the 20% drop point. The sheer size of your transaction - perhaps done because you've seen a couple of other big sales do the same thing - spooks the market. Suddenly all the traders who have been buying in to the currency are worried and they want out as quickly as possible. They start to offer their holdings for sale at steep discounts, each sale taking place way below the buying price.
In no time the price of Bitcoins falls through the floor... Everyone wants to sell, nobody wants to buy. Except, perhaps, the suckers who had "buy orders" programmed into their trading platforms if ever the price was "foolish" enough to dip below their target price. Suddenly all those folk with automated buy positions get their trades executed, even while the price continues to tank.
You watch the price plummet. $19,000, $18,000, $17,000, $16,000, $15,000. Eventually it hits $14,000 and the "dead cat bounce" starts - the price starts to look soooo stupidly attractive that more nuanced traders begin to buy back in. The price rallies. You buy enough coins to cover the "sale" you made at the beginning of the day. Except that you "sold" for $16,000, but you bought back in at $14,500...
Now let's do the math and figure out how much you made [before transaction fees]. You "sold" $10,000,000 at $16,000 each, which means that you sold 625 coins. Then the price dropped to $14,500 and you bought 625 coins to cover your earlier sale. But because you only had to pay $14,500 for them, you actually pay out $90,625,000. So you've made $9,375,000 with "Other People's Money" - all in a single day.
Congratulations, you've just passed "Banking 101"....
Oh, and for those who read this and think, "That's all well and good in theory, but it would never happen in practice..." I'd remind you that roughly 20 years ago, "Black Wednesday" happened, which absolutely devastated the value of UK Sterling on international exchange rates - and in the process made George Soros, who bet "against" the Pound in *exactly* the way I've just described here, a billionaire.
Until the practice of "short selling" - what I've just described in this post - is made illegal, there is *nothing* to stop this happening with Bitcoin, or with any other traded commodity. Bitcoin is no longer operating like a currency [if it ever truly did], but is now operating exactly like a "bubble" commodity, just like the dot-com boom, like antique cars, like works of art, like vintage wine.
It's difficult to know for sure, but this event has all the hall-marks of someone attempting to burst the bubble and make a killing. I reckon if there was some short selling in this window that someone might have made a noteworthy profit, but unlikely what we saw George Soros make. Whoever it was, they'll get it right next time...
A whole bunch of people ... (Score:3)
... sold high and parked their shit in cash.
When BTC went to $12,000 the cash-holders started buying back.
That's how it's done.
Bitcoin volatile, news at 11 (Score:3)
So now it's back up to 14,777 as I type this comment. Does that mean this story should be updated?
coinbase added BCH, margins and interest, exits (Score:5, Interesting)
Coinbase added support for Bitcoin Cash on Tuesday. They also gave everyone 1 BCH for each BTC you had at the time of the split. This should have flooded the market with BCH and driven the price of BCH down. Also the sellers of BCH should have invested in other currencies and pushed those prices up. The opposite happened. News that coinbase was accepting BCH actually pushed BCH's price up and the shift to BCH caused other currencies to fall.
Most of the trading is now automated trading. You can also buy on margin. However the margin has a 1.5% interest per day. Then funny things happen. If someone borrows 1 BTC and shorts it, and then buys an equivalent amount of 10 other more volatile coins using that money they could cover the interest. For the past 2 months this worked really well. Most smaller cap currencies have gone up more than BTC by more than 1.5%. It seemed like low risk investing. People treat crypto like the stock markets treat stocks assuming that having 100 different stocks has less variability than 1. Unfortunately like the stock market, there is a high level of correlation in price change.
Now after Tuesday, people who had margin accounts had to top up their margins. This caused a slow sell but the interest rates made borrowing for more than 3 days difficult so starting late last night a lot of people had no choice but to sell.
Exit strategies - eventually everyone has to actually use their money. I know a lot of people who have made 10x their investment. Their exit has been if it falls 30%, I sell 50%. So if they put in 100K, they had 1M yesterday, 700K this morning and then sold to have 350K in fiat and 350K still in crypto. You can automate that sell.
The weird part. There are no natural sellers in crypto currencies. They aren't backed in any meaningful way anymore. After this crash all the remaining people who own crypto are non-sellers. They are greedy and will hold indefinitely. The margin people who had to sell are gone, my friends with exit strategies are out. The only sellers left are people who are moving money between crypto currencies. The prices of most currencies not in the top 10 market cap are going to jump 15% before the day is done. In a week the money will be poring back in and zero money will be being pulled out.
I was wrong about the 15% gain - already 20% (Score:3)
Tulips (Score:4, Interesting)
The reason has been known for hundreds of years.
But we will never learn that a bubble is a bubble is a bubble.
Bitcoin is a bit of technology/algorithms that would be useful if it weren't so cumbersome. There are better, more recent, solutions for the same problem, and Bitcoin will fall by the wayside.
In the meantime, none of these things are actual currencies. It's just people playing chicken pretending there's something to back the "currency" and passing the hot-potato along until somebody gets stuck with it.
Some day, governments or others that can act as a store of wealth may use similar technology.
Re: (Score:3)
Re: (Score:3)
At the height of the tulip craze people were purchasing tulip *futures*. The were purchasing the grandchildren or great-grandchildren of a current high value tulip. Also options as well.
Same as it ever was.
Re: (Score:2)
then it might actually be useful as a medium of exchange.
Re: (Score:2)
except for the trades booed by some Big Daddy. "Of course sir, to the front of the line"
Re:Maybe it has something to do with the 4 day wai (Score:5, Interesting)
Coins are not lost if the transaction isn't processed. The sender still owns the coins until the public distributed ledger says otherwise, which it won't until the transaction is confirmed and included in the block chain. The protocol has a "replace-by-fee" (RBF) where you can just re-create a new transaction with a higher fee than the old unconfirmed transaction and the new transaction, once confirmed, becomes the fate of the sender's coin, and the old transaction, if it ever gets processed, will be rejected as that coin has already been spent.
Re:Maybe it has something to do with the 4 day wai (Score:5, Interesting)
Great. So I'm a local electronics store. I sell someone a laptop for .1 BTC. Fair deal. That transaction is queued for a few days. He wants to walk out of the store with the laptop today. Either the store takes a huge risk of fraud (or even mistake), or the user can't get what he buys for days. Which is why anyone who thinks this is a workable currency is a fucking idiot.
Re: (Score:3)
"No one goes there, it's too crowded"
There are enough transactions to fill the blockchain, obviously someone is using it.
Re: (Score:3)
Why the heck did you not just use the national currency of whatever country your store is in?
Bitcoin is not a currency. It's a payment network, and its properties make it best for transactions between two distant people, i.e. online shopping. If you can meet in person then just use cash.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
demand and supply
Bitcoin Cash is not a new idea, it's the original (Score:2)
Bitcoin Cash testnet show 2000 tps (Score:2)