
Hacker News is more interested in Bitcoin when there's a bubble forming - nvk
http://incoherency.co.uk/blog/stories/hacker-news-bitcoin.html
======
dperfect
Looking at the actual charts presented in the article, I can't help but draw a
very different conclusion: the spikes in Bitcoin-related HN posts do not
_precede_ BTC price increases, but instead they more or less mirror the price
swings (as do most other relevant news sources).

It's deceiving, especially at the scales used, because it's easy to compare
the peak of a price swing with the uptick in news stories (implying some kind
of predictive power) when in reality, the upticks in stories are fairly
proportional to the price changes leading up to the price peaks - it's just
not as noticeable due to the difference in scales.

As with other markets, a trading strategy based on public news is - for any
normal trader - a losing strategy. The people who _are_ able to make gains
based on news in other markets often have to pay a premium to colocate servers
at or near the exchange's servers, and a trade delayed by more than a few
milliseconds will have lost any potential upside in the market's reaction to
the news. You can bet on the same thing happening with Bitcoin (and the
decentralized nature of Bitcoin doesn't change the requirement to be located
near the exchanges' servers since these trades all happen outside the
blockchain - i.e., on traditional servers).

~~~
kbody
Exactly, so many times I've seen BTC price reaches $X. A Github repo of the R
files for a public review would be nice.

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Leader2light
We are past bubble stage with Bitcoin IMO. It has failed to become much other
than a bullshit investment vehicle. People only worried about how high it can
go, instead of actually using it daily.

~~~
LyndsySimon
> It has failed to become much other than a bullshit investment vehicle.

I disagree, and think there is some observation bias going on here. I've been
using a Bitcoin-linked debit card for a couple of years now, and take payment
in Bitcoin for odd jobs I do for people online. I also always list that I
accept Bitcoin when I post things for sale on Craigslist and other
"classifieds" sites, and probably 10% of people use it for payment now. I've
had several people buy things from me on Craigslist from across the country
and the world that I wouldn't have accepted otherwise due to payments fraud.
I'm happy to ship a $400 fountain pen to a buyer in Lagos (which I've done!)
if they pay in Bitcoin, but I'd never consider doing so if they used any other
payment method for fear of fraud.

I don't see anyone posting about everyday uses, but they do seem to be
happening.

> People only worried about how high it can go

The only time I really think about the current price of Bitcoin is when it's
in a period of volatility. Otherwise it seems to be consistently slightly
deflationary, which is exactly what I expect it will be long-term.

~~~
travisby
If it's a $400 fountain pen and not a 144mBTC fountain pen, then I think you
are thinking about the current price of bitcoin ;)

I'm assuming you're placing your ad in USD and converting to BTC for the
transaction, instead of listing a BTC price.

~~~
lloyd-christmas
Many finance publications use USD regardless of their country of origin.
Financial Times, a UK-based company, regularly lists valuations with USD
equivalent. Does that invalidate the GBP or EUR as real currencies? The market
cap of USD is over 1.5 trillion. The market cap of bitcoin is $45b USD. It's
more than sensical to display equivalent conversions.

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5trokerac3
Can you blame a startup oriented news aggregator for being drawn to bubbles?

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Paul_S
HN is not special. Every public exposure precedes a bubble, that's how it
works, influx of new buyers raises the price.

~~~
LyndsySimon
Intuitively, HN _may_ be special. We're probably the most tech-savvy community
of our size on the Internet; I would expect that HN would discuss happenings
in the world of cryptocurrencies before, for instance, the NY Times.

I would also expect that the demand that drives market bubbles comes from a
larger, less-technical audience. Therefore, I would expect that news hitting
HN would be one of the first indications that a "hype cycle" is starting,
which will likely result in a price increase due to speculation by the general
public.

~~~
mtgx
If NYT is the "mainstream" general media, then HN is the "mainstream" tech
media.

Just as some stuff reaches the NYT late, most tech stuff tends to reach HN
quite late, too. A perfect example of that is the "hype" for cryptocurrencies.
The hype cycle is not _starting_ when it reaches HN, but it's close to its
peak at that point.

HN started being interested in Ethereum and Bitcoin again less than two months
ago. That's pretty much when both of those reached their peak prices in this
cycle. So when Ethereum, or Bitcoin, or some other hot cryptocurrency reaches
HN in a year or two, know that then it's not the time to buy it, but to sell
it (obviously if you already knew about it beforehand, which you wouldn't if
you only got your crytocurrency news from HN, as mentioned above).

~~~
spondyl
Considering Floyd Mayweather just announced he's going to make a "shitload of
money" thanks to an upcoming ICO in August, I think we're definitely at, or
very near, peak hype for crypto.

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rpod
The direction of causality, if it exists at all, should probably be the other
way around.

~~~
hyperpape
Did you see something in the article that implied causality? You can make
predictions without a direct causal link, though having one typically helps
you make more robust predictions.

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wolco
This is not true stories come out all of the time. The big news lately isn't
related to price but the split.

~~~
LyndsySimon
> The big news lately isn't related to price but the split.

These things are not mutually exclusive. The fork will have an impact on
price.

~~~
lloyd-christmas
I'd argue it's already priced in. There wasn't even a slight reaction when
coinbase notified their customers that they wouldn't support the fork.

I used to work as an equities trader. One of the first things they told me was
"if you know something, the market already knows it".

------
flipp3r
This is just when there's tech news on Bitcoin. If you want to get ready for
bubbles just keep an eye on google trends "how to buy bitcoin". Worked for me,
admittedly only once though.

~~~
skgoa
When I overhear random people on the train, my coworkers during coffee break
etc. discuss bitcoin, I know that the bubble is about to burst. This predictor
has never failed.

~~~
nannal
It's an age-old tell

[http://archive.fortune.com/magazines/fortune/fortune_archive...](http://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm)

~~~
spondyl
Thanks for posting this. I think this sums things up pretty well.

------
_1
Everyone loves to watch a train-wreck.

~~~
nannal
Yes, the train wreck that has been bitcoin.

The $2765 train wreck.

As it continues to plummet ever further upwards onlookers can only watch and
exclaim.

------
yohann305
the post could have had a lot more value if it compared against other news
outlets to see if HN has its own independent trends or it just plain and
simple follows media trends.

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donquichotte
From TFA: "You might have got the imperssion that there are a lot of Bitcoin-
related posts on Hacker News lately."

A typo in the first sentence means to me that quality control on form, and
possibly content, was neglected when writing this post.

~~~
jstanley
Fixed now, thanks.

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dnautics
Would be great to see the BTC price chart in the overlay graph in logarithmic
fo, it may uncover that third incident early in the chart.

~~~
reefoctopus
Here's a logarithmic graph:
[https://bitcointalk.org/index.php?topic=831547.0;all](https://bitcointalk.org/index.php?topic=831547.0;all)

It doesn't look like it's in bubble territory.

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danschumann
I read somewhere that bitcoin was deemed a pyramid scheme. Not sure about
that, but doesn't it get more and more expensive to do transactions as more
and more people use it? Is there a limit to unique sigs people could use?

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eastern
This 'researcher' has no control group. There's more interest in a financial
asset when the price of that asset (or asset class) is increasing sharply.
That's all there is to it.

