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Bitcoin The Almighty Buck

Dropping Nearly 20%, Bitcoin Suffers Worst Weekly Drop in a Year (fortune.com) 140

Posted by EditorDavid from the magic-internet-money dept.
"Bitcoin's rally this year has hit a speed bump, putting it on track for the worst weekly slide in almost a year amid wider losses in risk assets," reports Fortune: The largest cryptocurrency slumped as much as 20% this week, the most since March, and was holding at about $46,925 as of 10:22 a.m. in Hong Kong. The wider Bloomberg Galaxy Crypto Index, tracking Bitcoin, Ether and three other cryptocurrencies, is down 22% this week...

Bitcoin's weakness in the face of market gyrations raises questions about its efficacy as a store of value and hedge against inflation, a key argument among proponents of its stunning fivefold rally over the past year. Detractors have maintained the digital asset's surge is a speculative bubble and it's destined for a repeat of the 2017 boom and bust.

While Bitcoin is often touted as the new "digital gold," the yellow metal is winning out at the moment with spot gold holding at $1,768 per ounce, down less than 1% for the week.
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Dropping Nearly 20%, Bitcoin Suffers Worst Weekly Drop in a Year More

Dropping Nearly 20%, Bitcoin Suffers Worst Weekly Drop in a Year

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  • Good (Score:3)

    by Billly Gates ( 198444 ) on Saturday February 27, 2021 @10:44PM (#61107178) Journal

    Will I finally be able to buy a video card. Not one from 2016 valued used at over $1500 on ebay

    • Is that what's driving the graphics cards? I thought that several years ago they started to not be worth it because there were mass-produced specialized ASICs for sale that did calculations vastly more efficiently?

      • That depends on which cryptocurrency is being mined. Many cryptocurrencies today now use ASIC-resistant algorithms and are instead being mined by GPU or CPU, including Ethereum and Monero.

        • That depends on which cryptocurrency is being mined. Many cryptocurrencies today now use ASIC-resistant algorithms and are instead being mined by GPU or CPU, including Ethereum and Monero.

          What did I tell you? "Investors" buy Bitcoin because its money supply is mathematically limited. Too many Dutch flower traders chasing too few Bitcoin drives the price up. The next thing that happens in these meltups, and it happens every single time, is that gamblers who think they missed the boat on BTC start buying other, lesser known cryptos, purely because they're cheaper. The market is only too happy to sell new cryptos, each with its own mineable millions of coins, into the teeth of the faddish deman

        • Re: Good (Score:4, Insightful)

          by Z00L00K ( 682162 ) on Saturday February 27, 2021 @11:54PM (#61107318) Homepage Journal

          Bitcoin is just a pump and dump item. That's why it's swinging.

          ASIC-resistant is only until someone figures out a better design.

          But all cryptocurrencies only work because they can be exchanged to real money. If they no longer can, then they become worthless.

          • It's not ASIC-resistant because it would be hard in ASIC. It's resistant because it's easy in GPU. Bitcoin algorithm is sufficiently hard neither CPU nor GPU are particularly efficient at it, and so ASIC can outpace them by strides, gains of order of 100x the speed. For Ethereum there's very little you can do to get any more efficient than with GPU. Any ASIC would be essentially a GPU without video output, possibly optimized to match the requirements strictly. You'd get maybe 20-30% savings providing the sa

            • Re: (Score:2)

              by Rei ( 128717 )

              To be more accurate: Bitcoin's algorithm is compute hard, while Ethereum's is memory hard.

              Either way, both ASICs and graphics cards being used to mine cryptocurrencies have been taxing the capacity of foundries as of late. If you think it's hard to get a graphics card, look at what automakers are going through trying to get cheap automotive chips (the sort of low-margin low-tech stuff that foundries prefer not to be making)

    • Clearly, ....*buying* it is the problem here. :)

      Have you tried ... smarter options? ;)

      I mean with so many morons out there, with too much money. I'm sure even a basic. "You give me money, and then I give you nothing. Basically you just give me money. Because you want to. In fact you insist. You force me to take it!" would work, if worded the right way. ... Oh wait! ;)

      No, to be serious: A media industry bank equity selling job coin loan licenses sounds about perfect. Just make sure you are the boss, so you d

    • I was talking about that with someone today. I bought a 750ti for 100 dollars in 2016, and I sold it two weeks ago for 85 dollars.

    • This post shows how informed slashdot is when it comes to bitcoin. Mining bitcoins with a GPU hasn't been profitable in many years.

      • Re: (Score:3)

        by dmt0 ( 1295725 )

        Also, if he would've bought bitcoin last year, he would actually be able to afford himself a graphics card.

      • Re: (Score:2)

        by tlhIngan ( 30335 )

        This post shows how informed slashdot is when it comes to bitcoin. Mining bitcoins with a GPU hasn't been profitable in many years.

        And now informed you are about cryptocurrency in general. Or associated markets and economics.

        Bitcoin rises, so do associated cryptocurrencies - namely, Ethereum.

        ETH mining is done on GPUs and the vast majority of GPUs bought up are doing ETH.

        Bitcoin falls, ETH falls as well. I can't tell you how much, because there's no perfect relationship, but in general the cryptocurrency ma

      • Re: (Score:2)

        by Rei ( 128717 )

        Except that many other cryptocurrencies like Ethereum are mined with GPUs, so perhaps you should not be so quick to damn others for having bad information.

        Either way, ASICs or GPUs, it all comes down to foundry capacity. A foundry can tool to produce a new product in just a couple months, but it takes years to build a new foundry.,

  • Live by hype die by hype.

  • bitcoin has way to much volatility

    • In this very forum a week or two ago it was suggested that as mor einstitutions buy into Bitcoin, the volatility will decrease. I'm not sure I'd buy into that just yet, but it does seem to be holding true. Bitcoin touched 50k but it has not tumbled back to 10k. Recently, there seems to be significant support keeping Bitcoin above 40k. This is so fun to watch.

      • Until they sell. The big institutional investors, hedge funds, etc, tend do tweaks along the way and potentially sweeping changes after quarterly review (obviously policy varies per place but in general).

        Once some predefined trigger point is hit there will be mass Bitcoin dumping from one which will send Bitcoin down which will trigger a cascade of automated selling from the others forcing Bitcoin down further and faster and so on until the price per coin normalizes as something less ridiculous but not yet

        • tbh it sounds like you decided what you wanted then looked for something to support it, rather than thinking of it scientifically. To think scientifically, create a hypothesis (e.g. bitcoin will tumble) and then look for evidence to attack your hypothesis.

          • I don't want anything. Bitcoin up or down has absolutely zero impact on my life. My emotional stake is zero.

            I think Bitcoin is yet another textbook tulip craze but on computers. A Bitcoin has zero intrinsic value, it is backed by nothing, it can not be spent like real currency and yes I'm aware a few bleeding edge companies are willing to take an edgy risk by accepting them. Try paying your rent with a Bitcoin. At least tulips are pretty.

            Every single other equity or commodity or unit of agreed upon eco

  • Relative Value (Score:5, Insightful)

    by TechyImmigrant ( 175943 ) on Saturday February 27, 2021 @10:53PM (#61107210) Homepage Journal

    If it had gone from $40,000 to $46,925, the story would be its strength. Since it's gone from above $50K to $46,925 the story is its weakness.

    $46K is a very high price for bitcoin given its price history. Judging its strength or weakness based on one week of price movement is hardly the basis for a compelling thesis. But I guess they have to make up a story in order to fill words on pages.

    • The problem is it moved 20% in 1 week (Score:5, Insightful)

      by rsilvergun ( 571051 ) on Saturday February 27, 2021 @10:59PM (#61107232)
      Meaning you can't store money in it you can't afford to lose.

      Imagine you're a business that accepts Bitcoin. Your entire inventory just dropped in value 20% unless you manage to reprice it before new orders come in.

      Or Imagine if you were one of those futuristic people paid your salary in Bitcoin and it's value dropped 20% this week, meaning you just took a 20% pay cut. Rent / mortgage's still due and you can bet you won't be getting a discount to compensate.

      • Meaning you shouldn’t store money in it you can't afford to lose.

        Plenty of people place their life savings on a single gamble, but rarely considered a good idea.

        Don’t worry, if bitcoin has taught me anything, it’s that it almost assuredly will drop to 11k before shooting the moon at 70 but no one has any idea when either will happen.

        • very few do what you're describing knowingly. I know a lot of boomers who let their pensions go for 401ks without realizing the implications. A few made out like bandits, the rest retired during one of the many downturns and are living like paupers and borrowing money from their kids.

          Human beings are very, very risk adverse, especially about basics.

          BTC's problem though is that it's so tiny relative to our economy that it's prone to market manipulation. There was just an article saying the $11 billio

        • >Plenty of people place their life savings on a single gamble

          Yep. Count me in. We sold the house, rented one instead and put the profits into Tesla stock mid last year. No regrets. I'm facing retirement with adequate funds. The alternative (surviving off the crappy 401k fund performance, the crappy company pension performance, the social security that won't even be available for a few years) was not going to be a happy outcome.

      • Re:The problem is it moved 20% in 1 week (Score:4, Funny)

        by ceoyoyo ( 59147 ) on Sunday February 28, 2021 @01:46AM (#61107486)

        Yay, 20% off sale on Teslas!

    • You've missed the point of the article in your rush to post.

      "Bitcoin's weakness in the face of market gyrations raises questions about its efficacy as a store of value and hedge against inflation"

      The point is that investing in Bitcoin is a gamble. You can't be certain that the value will go up because it swings wildly. You don't put your life savings in an unstable investment like that.

      • I didn't miss it, but I didn't talk to it either. I never considered it a stable store of value. It's an investment or hedge right now. I has the potential to become more stable as others have pointed out.

    • But I guess they have to make up a story in order to fill words on pages.

      It's amazing how many people don't understand this simple concept.

  • Future Headline (Score:1)

    by Anonymous Coward

    In the very near future, the headline will state that bitcoin has hit a new all time high and has a market cap of over $1.5 trillion.

  • After Bitcoin's amazing upsurge... (Score:3)

    by QuietLagoon ( 813062 ) on Saturday February 27, 2021 @11:10PM (#61107246)
    ... it is any surprise that it needs to take a break, sit down, take some time to rest? There is much work ahead that needs to be done. Bitcoin needs to be in the appropriate condition to do that work.

  • Interest rates (Score:4, Interesting)

    by stabiesoft ( 733417 ) on Saturday February 27, 2021 @11:30PM (#61107280) Homepage
    Treasury rates were up slightly, BTC was down. If treasuries continue to rise, and they may as commodity prices are ticking up (wood, copper, oil as 3 examples), the fed may have to raise rates. If they do, many stocks and cryptos are going to take a big hit.

    • Re: (Score:3)

      by Rei ( 128717 )

      This is the amusing part, all of the bitcoin advocates shouting that bitcoin is a "hedge against inflation". Rates go up (correlated with an expected increase in inflation, which FYI is too low at present), and bitcoin goes down. Because it's a speculative asset, and speculative assets get dumped as treasury rates rise.

      If you want an actual hedge against inflation: buy land, durable goods, etc, and companies rich in them (particularly ones that have indebted themselves in dollars to buy such things). Thi

    • Central banks acting responsibly is one of the side effects of healthy competition.

  • Even a carrier pigeon won't move your bits...

  • The entire market has a massive downturn this last week - pretty much everything. Commodities (like Gold), Bitcoin, stocks, all of it pretty much fell.

    What is basically means, is that a lot of people decided to move into a larger cash position so they could take advantage of falling prices eventually.

    • Re: (Score:3, Interesting)

      by 93 Escort Wagon ( 326346 )

      Commodities (like Gold), Bitcoin, stocks, all of it pretty much fell.

      It says, right there in the summary, that gold was down less than 1%.

    • Re: (Score:3)

      by hjf ( 703092 )

      Indeed. I hold to APPL and TSLA and when i went to check, I was in the red.

      But since I'm not a hyped idiot I know market fluctuations are entirely normal.

      • Re: (Score:2)

        by Rei ( 128717 )

        Indeed. And while I don't care about the short-term either, I think the market has overreacted significantly and may be due for an upwards correction. Namely, unemployment is still far too high and inflation far too low; it's not in the Fed's interest for interest rates to rise this soon. Wouldn't be surprised if they tamp this down.

    • Yeah, unless you bought BTC very, very recently, you're still way ahead and you'll continue to be way ahead even if they slide by another 50% or so.
      • You do know that the way speculation works, the total dollars are the same just reshuffled. So the gains of people who sold at 50k are exactly balanced be people who bought in that high.
        • What's your point? We also know that in the aggregate, stocks will always beat T-bills over time Obviously you can contradict that with an individual stock and a short time horizon but you're being a retard if you do. Same goes for crypto.

          • My point is you said "Yeah, unless you bought BTC very, very recently, you're still way ahead and you'll continue to be way ahead even if they slide by another 50% or so." Which, since Bitcoin is speculative isn't a real thing since the total thing is zero-sum.

  • Happy times (Score:3, Funny)

    by ladislavb ( 551945 ) on Sunday February 28, 2021 @01:00AM (#61107426) Homepage
    It looks like many Slashdot readers are happy today. Congratulations!

    • Why wouldn't you be? Seeing a crash is a great opportunity for investment. I hope bitcoin plummets and takes TSLA down with it. That way we can by TSLA shares and watch them ride the hype train up again.

  • "News" that isn't (Score:1, Redundant)

    by peterww ( 6558522 )

    Are we going to get a /. post about Bitcoin every time it swings? Because a quarter of the posts are going to end up just being "oh boy Bitcoin prices have changed!" and Bitcoin fetishists will already find that out somewhere else.

    • Re: (Score:2, Redundant)

      by ceoyoyo ( 59147 )

      Are you new here?

      Whenever bitcoin is on a tear Slashdot has at least one story daily. If it goes up, it's awesome and going to the moon! If it goes down, it's a great time to buy in, quick don't miss your chance!

      Suspicious? Yes.

  • Here's a couple of good Twitter threads [twitter.com] by Stephen Diehl (@smdiehl) about what Bitcoin really is (with an earlier one further down below).

    Let's discuss the environmental cost of bitcoin. Because despite all the push for sustainable and green investment in the tech sector, there's a giant smoldering Chernobyl sitting at the heart of Silicon Valley which a lot of investors would prefer you remain quiet about. Thread (1/)

    TLDR on bitcoin economics: It's a pyramid-shaped investment scheme backed by the collecti

  • But instead of a few days, it takes a decade to go up then tank

  • Instead of innovation, the west is doing stupid investments like this.

  • Obviously it is a careful, slow dumping, they may still manage to get more idiots to give real money for hot air. But this is what the have worked towards all along.

  • Another story about the continuing saga of a digital pyramid scheme.

    • Re: (Score:3)

      by Rei ( 128717 )

      It's not a pyramid scheme! You need to read the whitepaper by the coin's inventor, Satoshi Amenhotep.

  • In other news, the tulips are starting to wilt.

  • Inside information and/or influence with major governments at the very highest level is the only hedge against inflation. TPTB will always leave some doors open to escape from for their own, but you can never know which ... and they have the power to close all others.

    That said, Bitcoin is a long lasting mania. Buy low, sell high ... that's all it's for.

  • Well, yes (Score:3)

    by OneHundredAndTen ( 1523865 ) on Sunday February 28, 2021 @10:07AM (#61108108)

    Cryptocurrencies remain good for three things, and three things alone:

    1. Speculation.

    2. Money laundering.

    3. Consuming vast a mounts of electrical power.

    That's it. Maybe one day they will be useful for something else. As of today, they are not.

  • A 75% drop after big runs is normal for Bitcoin. It happened the last 4 (5 ?) times. Of course today is different in the sense that techie speculators have been joined by Wall Street speculators and ordinary people speculating. It will be interesting to see how the non-techie crowd reacts.
  • It seems as though there is an increasing amount of negative press about Bitcoin being posted on Slashdot. Almost as if there are people using traditional monetary sources are afraid of a decentralized currency from being used by the same massed that played the hedge funds with GME stock.

    If there's one thing I've learned is that people always seem more money and more power and will fight tooth and nail to prevent losing either.

    Bitcoin is both money (spendable) and power (decentralized from controlled

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