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Bitcoin The Almighty Buck

Bitcoin Loses 32% of Its Value This Week, Falls Below $4,000 (usatoday.com) 201

Posted by EditorDavid from the magic-internet-money dept.
An anonymous reader quotes USA Today: Last year at this time, bitcoin was in the middle of a 217-percent rally that saw its value peak in December near $20,000. Now the largest cryptocurrency can't stay above $4,000 -- losing almost 32 percent in value this week and briefly hitting its lowest level since September 2007 at $3,477.58 on Sunday, according to data from CoinDesk... Other cryptocurrencies also languished. XRP fell 10.4 percent from its 24-hour open, while Ethereum was down 7.5 percent. Litecoin lost 6.7 percent, according to CoinDesk. This week's sell-off marked the largest one-week decline since April 2013 when bitcoin lost over 44 percent of its value, according to CoinDesk...

Year to date in 2018, bitcoin has declined more than 71 percent... The cryptocurrency jumped from $6,088.35 in mid-November 2017 to $19,326.49 on Dec. 17, 2017... Citing three unnamed sources, Bloomberg News also reported last week that the U.S. Justice Department is investigating if market manipulation caused bitcoin's 2017 rally.
Earlier this week, one financial advisory firm's CEO told CNN that they were still bullish on bitcoin. "Savvy investors understand that digital currencies are the future of money and, as such, they will be capitalizing on the lower prices in order to build their portfolios and shore-up their positions."

But not everyone seems convinced. "I bought $10 of bitcoin a year ago. Just to see how it goes," posted Austin-based technology reporter Mike Melanson on Twitter, adding "It's worth $3.45 now. Quite the investment!"
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Bitcoin Loses 32% of Its Value This Week, Falls Below $4,000 More

Bitcoin Loses 32% of Its Value This Week, Falls Below $4,000

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  • $10 once does not seem like "investment" (Score:4)

    by SuperKendall ( 25149 ) on Sunday November 25, 2018 @05:38PM (#57698268)

    If $10 spent one time is an investment, there are a lot of lottery players "investing" as well.

    If you are really treating it as an investment, you might spend only $10 - but every month. When it's way up? $10. When it's super low? $10 more, adding to the slowly growing stash of bitcoins you never sell...

    There are a lot of other investment strategies as well, but it seems like all of them have in common that you are doing something over time.

    • Crypto is not a blue chip stock. You don't buy it and get rich. You make money by day trading just like the real stock market.

      • Re: (Score:1)

        by Anonymous Coward

        Empirically, the vast majority of day traders lose money. Those who haven't just haven't day traded long enough. There's no way to compete with well-trained experts who have computer systems that benefit from milliseconds.

        You make money by investing long in index funds.

      • Re: (Score:2)

        by rtb61 ( 674572 )

        Actually bit coin is all about trading in beliefs. It's value is purely a matter of faith and reflects, well, to be accurate, nothing more than a measure of the marketing associated with the product. It is backed by nothing, normal currencies are backed by the overall value of the state, it's territories, resources, society and bitcoin is backed by 'believe me, it will be worth $100,000 per coin, believe me, make others believe you, everyone must believe bitcoin == $100,000 per bitcoin in the near future, i

      • It's not a currency either. It's not a money, too illiquid and unstable. Actual US dollars are mostly digital, only a small fraction physical. Block chain and crypto coins are fads that will soon be dead

      • You are conflating trading and investing. Those are different things.
        Day trading, where one buys in at the beginning of the day and sells out by the end hence the name, and trading in general are about short term gains and while one can make a lot of money doing it, one can also lose a lot of money.

        Investing for significant gain is done by buying stocks that are not blue chip stocks, which are often megacap corporations, but rather by buying up and comers.
        Because blue chips generally aren't going to i

    • The bullet for the head to Bitcoin is all lined up now.

      At this moment all the miners with inefficient rigs are going to exit system. Just the people stealing power will be left soon since the difficulty is still high. It takes a while for bitcoin to renormalize the degree of difficulty to a mining rate decline.

      Thus at this moment there's probably vast amounts of excess capacity idle.

      Someone could purchase that and easily have more the 51% of bitcoin. And then when all those transactions get reversed, not

    • Re:$10 once does not seem like "investment" (Score:5, Insightful)

      by Zocalo ( 252965 ) on Sunday November 25, 2018 @05:54PM (#57698332) Homepage
      If you're putting money into an investment every month then you sure as hell shouldn't be going with something as volatile as Bitcoin. Regardless of what you are investing in/gambling with, volatile commodities are something you need to monitor continually and really play the market, ideally buying low and selling high with each and every significant rise and fall. If you're titheing a given amount to your commodity of choice on a regular basis then you want something that's going to have a pretty good chance of a return no matter what - blue chips, government bonds, and so on - and even then, keep an eye on it and be mindful of opportunities to sell of exchange for another commodity.

      There's also a lot of desperation amongst the institutional BTC bagholders at this point, especially those who were dumb enough to make significant purchases when it was already over $10k, so there's no way I'm going to be taking the financial advise of this Nigel Green of deVere Group unless he makes it perfectly clear what their BTC position is at the same time. Without that information it's kind of hard to tell whether he genuinely believes it's going to rally or he's just another desperate bagholder hoping to cut his losses.
      • deVere Group appear to have sunk a large amount of investment into BTC and crypto in general. Any investment advise from them in this area should be considered seriously tainted.

      • It's perfectly fine to invest monthly in something volatile, if it is a LONG TERM investment. It's much better than putting everything in at once. Monthly savings acts as a low-pass filter and makes sure you do not put all your money in when it is already at a local high. The important thing is that is has an upwards trend. And that is the reason Bitcoin is a shit investment right now. It has a downwards trend, and there is no fundamental reason that trend would change.

        Buying low and selling high, on someth

    • Re: (Score:1)

      by Anonymous Coward

      The obvious intent of the summary is to defend bitcoin. playing on the idiot twitter reporter and is $10 to give as little weight as possible to the loss while changing deVere Group (a group with a vested interest in crypto currency success) to "one financial advisory firm's CEO" in order to make those that don't check think perhaps some legitimate advisory firm without a serious vested interest is making this statement. Very sad effort from whoever wrote that shit.

    • Buying lottery tickets is not an investment because it has a poor expected value (most of the time). This is why playing slot machines or black jack is also not investing. Maybe playing poker is if you are good at it. It is very possible that bitcoin currently is a poor investment from a speculative perspective, given that we don't know what it will do, it's not strictly a bad investment from a mathematical perspective.

      I would not buy bitcoin now. But if I had a choice between buying bitcoin and lottery

    • And FYI there actually are lots of people "investing" by playing lotteries (not "the" lottery). https://en.wikipedia.org/wiki/Prize-linked_savings_account [wikipedia.org]
  • The fact that it's taking this long to finally reflect its true value... is the only reason this is even news.

    • Re:The fact that... (Score:5, Insightful)

      by phantomfive ( 622387 ) on Sunday November 25, 2018 @05:44PM (#57698298) Journal

      The fact that it's taking this long to finally reflect its true value... is the only reason this is even news.

      What is the true value of bitcoin? If you can actually answer that, you can make a ton of money by buying when it goes below the true value, and selling when it goes above. =

      If your answer is that bitcoin is worth $0, you are wrong.....at a minimum it has value as a money laundering and malware ransoming exchange medium.

      • Re:The fact that... (Score:4, Insightful)

        by timholman ( 71886 ) on Sunday November 25, 2018 @06:35PM (#57698472)

        If your answer is that bitcoin is worth $0, you are wrong.....at a minimum it has value as a money laundering and malware ransoming exchange medium.

        The "true" value is probably a lot closer to $4 than $4000. After all, it isn't as if alternate cryptocurrencies couldn't substitute for BTC. For that matter, gift cards and Western Union money transfers remain very popular with criminals. BTC isn't a requirement for anonymous currency transfers.

        The drop in BTC is hardly a surprise. BTC only rose in price while more money was flowing into the ecosystem than out of it. When BTC was a "thing", lots of suckers lined up with their money. But now its reputation is in the toilet. The general public sees it as nothing but the domain of criminals and scammers.

        BTC simply isn't news anymore. If you think 2018 was a bad year, wait until 2019.

        • Yep agree. I found the funniest and perhaps most telling piece of information is earlier this year the news here added BTC/USD in their list of currencies news, it was finally removed a month or so ago. The public no longer has an interest in it, Crypto currencies, exchanges and scammers have burnt all the interest and good will towards them and I doubt we will ever see that return without some fundamental change or exciting evolution.

      • Re: (Score:3)

        by Kjella ( 173770 )

        If your answer is that bitcoin is worth $0, you are wrong.....at a minimum it has value as a money laundering and malware ransoming exchange medium.

        It's a reason why users could put up with fees but it doesn't give one Bitcoin any particular value. If you're only converting back and forth to dollars it doesn't matter if it's 100 BTC or 0.01 BTC in the middle, only if you put $100 in does it come out as $99, $95 or $90 on the other side. And there's no inherent reason to use Bitcoin over any other crypto-currency, as long as someone will put a dollar value to it.

        • If you're only converting back and forth to dollars it doesn't matter if it's 100 BTC or 0.01 BTC in the middle, only if you put $100 in does it come out as $99, $95 or $90 on the other side.

          I think you should develop this thought further, it's not complete.

          • Re: (Score:2)

            by Kjella ( 173770 )

            I think you should develop this thought further, it's not complete.

            I thought it was easy to follow but let me spell it out further:

            1. I have USD and want to buy drugs
            2. I buy BTC for my USD
            3. I buy drugs with my BTC
            4. The dealer sells BTC for USD

            Even if the price of BTC stayed flat we'd be paying transaction and exchange fees, the seller would get less money than I started with. Like I pay $100, dealer gets $90 out and the cost of going via BTC is $10, compared to me handing him a $100 bill. Neither of us care what a bitcoin is worth. Or that it's even Bitcoin in the middl

            • So what is the value of bitcoin affected by then? What are the factors that determine it in that scenario?
              • (I'm not GP, but wanted to comment.) I agree with GP that crypto-coins should be thought of as transaction facilitators, not investment mediums. Any given crypto-coin could disappear, but individual coin stoppages are circumstantial and beside the larger point that -- economically speaking -- SOME crypto coins will always exist (unless outright prohibited by law at some future time), because they enable transactions that can't be micro-managed; e.g. if a government dislikes a particular foreign politica

      • personally for me it is worth 10 cents or maybe a little more but definitely less than a dollar, and it will stay at that value until i can use it everywhere as currency. because in my opinion if bitcoin is going to take on fiat currencies it must be able to be used for the same purpose

      • If your answer is that bitcoin is worth $0, you are wrong.....at a minimum it has value as a money laundering and malware ransoming exchange medium.

        So, for law-abiding citizens the value of Bitcoin is below zero. The only way they'll come in contact with BTC is when it provides criminals with an easy way to untraceably demand a ransom.

  • Good for the environment (Score:4, Insightful)

    by enriquevagu ( 1026480 ) on Sunday November 25, 2018 @05:42PM (#57698292)

    There are studies showing that bitcoin's power consumption is (theoretically) proportional to its value. This will significantly reduce its (huge) carbon footprint, higher than many countries.

    • True - as bitcoin crashes then miners leave, causing the difficulty to drop which means the blockchain overall requires less hash power. This is good as long as a 51% attack is impossible.

      But look at bitcoin's carbon footprint compared to the systems it could replace. Computers flipping bits has a far lower footprint than the sum of the carbon emitted for gold mining, minting, transport, storage and trade plus the carbon from the world's financial system running on paper. Think of all the carbon from having

      • Re: (Score:2)

        by roca ( 43122 )

        Transactions have already mostly moved from cash and paper to electronic. Bitcoin was not and is not needed for that.

        Bitcoin's distinguishing feature is to replace "fiat" with "proof of work", and that necessarily entails a vast increase in energy consumption.

    • These money easy to produce; and that cost nothing to print. Are inflated indefinitely; This will cost your saving value over time. The Venezuela is the perfect example of what happen when you trust the state... If an energy cost is required to kill these 'easy money'; I'm OK with this...

  • Cryptocurrency != Bitcoin (Score:3)

    by Fencepost ( 107992 ) on Sunday November 25, 2018 @06:26PM (#57698440) Journal
    Whoever it was that's still bullish on cryptocurrencies is correct in one thing - long-term it's likely that some form of cryptocurrency or at least a non-tamperable blockchain is going to become widely used. That does not mean that it's going to be Bitcoin, and in fact it probably won't be Bitcoin.

  • the pump and dump is in the deep dump part

  • Dogecoin is worth more this year than it was last year!

  • Isn't it funny how (Score:5, Insightful)

    by mark_reh ( 2015546 ) on Sunday November 25, 2018 @07:10PM (#57698604) Journal

    when the price is crazy high, you see ads all over TV about "investing" in gold, and when the price goes down, the ads disappear. BTC is the same way- when it was high people were talking it up to get the dumb money into it, and now that it's down, no one's saying you should "invest" in it, except maybe the "investors" who bought in at the high and are still holding on, hoping for a turn-around.

    "Investing" in BTC is like "investing" in casino chips or lottery tickets. Every once in a while someone wins, but the vast majority of the suckers lose their money. It is in the interest of the folks who stand to make money that we hear about the winners far more than we hear about the losers, even though there are many thousands or even millions of losers for every one winner.

  • Bitcoin's only real value is in the use for black market transactions or tax evasion. It costs too much to keep the infrastructure running both mining and logging transactions for it to be of any real value. A digital currency backed by a fiat bank or government will eventually take over crypto currencies.

  • Ethereum took an even harder it (Score:4, Insightful)

    by rsilvergun ( 571051 ) on Sunday November 25, 2018 @07:44PM (#57698736)
    it's at about 1/10 it's peak [coinmarketcap.com].

    I'm guessing somebody is done propping up the market. This is a bit too much of a drop off for it to just be a course correction.

  • 32% of PRICE (Score:5, Insightful)

    by Anonymous Coward on Sunday November 25, 2018 @08:15PM (#57698844)

    Bitcoin lost 32% of its price, not its value.

    Its value is identically zero.

  • Bitcoin is a hedge, not an investment. It is a hedge against the total collapse of the US dollar. The only thing necessary for bitcoin to be well accepted is for someone to commit to pricing a good or service of value in bitcoin for a sustained period. Example: Venezuela could sell oil at fixed price in bitcoin. Iran could do the same. Both countries have strong incentives to do this (if they were not blind to the reasons why). This could stabilize the price against oil, which might be enough to get more pe

    • You don't know what you are talking about. No one would use Bitcoin to hedge. Christ, Bitcoin nutters are so ignorant.

      • Not to mention that if the US Dollar collapsed, that would mean the US economy would have collapsed, and ... let's just say that if that happened, the BTC conversion rate will be the least of your worries

        If you want to hedge against the Dollar collapsing, I recommend ammunition and store brand pork & beans.

    • Re:It is a hedge not an investment (Score:4, Insightful)

      by Actually, I do RTFA ( 1058596 ) on Sunday November 25, 2018 @10:20PM (#57699320)

      . Example: Venezuela could sell oil at fixed price in bitcoin. Iran could do the same. Both countries have strong incentives to do this (if they were not blind to the reasons why).

      There's zero reason for them to do so. Venezuela launched it's own petro-based cryptocurrency. They can take all the value of a cryptocurrency backed by oil, and all the value of generating the genesis blocks.

      it is possible that all dollar denominated investments could become nearly worthless.

      You never say if what happens, but pretty much all investments are dollar denominated. If you're worried about massive inflation, you can just buy stock, gold or real estate. Any of those are better options.

    • Re: (Score:2)

      by shess ( 31691 )

      Bitcoin is a hedge, not an investment. It is a hedge against the total collapse of the US dollar. The only thing necessary for bitcoin to be well accepted is for someone to commit to pricing a good or service of value in bitcoin for a sustained period. Example: Venezuela could sell oil at fixed price in bitcoin. Iran could do the same. Both countries have strong incentives to do this (if they were not blind to the reasons why).

      The problem is that both countries do not internally produce the things they would want to purchase with the bitcoin they receive from sales of oil. The things they want to purchase are denominated in dollars. For various reasons the US has placed restrictions at least on Iran about providing them with dollars (Venezuela much less so). To some extent, if Iran were to accept bitcoin for oil, that would be helpful to provide cover for the buyer, but it doesn't really help Iran. In fact, it would probably

    • the bitcoin scam is augering into the ground and you call it a "hedge"??!!! LOLZ, do you crypto-curtards have any shame or common sense?

      https://www.bloomberg.com/opin... [bloomberg.com]

  • Not necessarily. It dropped in price compared to $USD. But that can also mean that $USD is experiencing inflation. The truth, IMHO, is somewhere in between. But the point is that assigning "value" based on $USD is fundamentally flawed.

    • If inflation for the USD was 32%, then on average prices will have risen 32% for common goods in the US. Did they? Don't think so.

  • the summary smells (Score:4, Insightful)

    by gravewax ( 4772409 ) on Monday November 26, 2018 @01:27AM (#57699808)
    "Earlier this week, one financial advisory firm's CEO told CNN that they were still bullish on bitcoin."

    So why change it to "one advisory firm's CEO" instead of Devere Group's CEO.... Ohhhhh right it is because then people would know it is someone that has sunk a lot of money into crypto currencies and them failing would also mean they fucked up. That is like asking the con man selling you the bridge whether there is any future value in owning the bridge.

  • Days of Black (Score:3)

    by mentil ( 1748130 ) on Monday November 26, 2018 @03:47AM (#57700098)

    Bitcoin: making Black Friday look like Black Tuesday!

  • Bitcoin is no better than Bitconnect. Both have a value of 0.

  • While I'm not disagreeing that Bitcoin's halo is tarnished... The article says
    > hitting its lowest level since September 2007
    When Bitcoin's original description was in a whitepaper published in 2009. How lazy does a reporter have to be to not even check a Wikipedia page? How well researched is the rest of the article?

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