
Bitcoin is tumbling – Off almost 40% from its high - fooey
http://www.businessinsider.com/bitcoin-price-is-tumbling-2017-6
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kcanini
From the first paragraph: "The cryptocurrency was trading down 12.9%, at
$2,161 a coin, its lowest since the beginning of June. It's now off almost 40%
from its high of $2,999.97"

The author fails at basic math: this is a decrease of (2999.97 - 2161) /
2999.97 = 28%, not 40%.

~~~
turtle15
Good catch. I'm guessing the author did (2999.97 - 2161) / 2161 instead.

~~~
elevensies
The tyranny of percentages. If you lose 50%, to get it back you have to gain
100%.

~~~
singularity2001
That's a nice motivational formula for weight loss

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Rmilb
Speculation is that this is primarily due to Bitmain's announcement yesterday
to hard fork if the UASF soft fork gets any momentum. Jimmy Song has a good
analysis on this.

[https://medium.com/@jimmysong/examining-bitmains-press-
relea...](https://medium.com/@jimmysong/examining-bitmains-press-
release-6b47b0646f15)

This forking of Bitcoin is a required trial that the chain must go through to
prove how resilient it is to this type of attack. It is unknown which chain
will win in the event of a fork, maybe Ethereum will win, probably not
PotCoin.

~~~
aznumeric
It's UASF, not USAF :-)

~~~
runeks
Which is short for "user-activated soft fork", meaning a group of Bitcoin
users (as opposed to miners) declare that they're following a new, backwards-
compatible protocol regardless of what miners think (if miners agreed, it
would just be a "soft fork").

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wakkaflokka
I have a little BTC and ETH just for fun.

It 'tumbles' and then 'skyrockets' quite frequently. Incredibly volatile.

I bought in at $16 for ETH right after the EEA announcement, pulled out my
principle at $54, and now I'm just watching this crazy roller coaster ride.
It's fun.

But I sure as hell am keeping my retirement in my 401k. I cannot imagine the
stress on people who have a substantial investment in BTC or ETH, but they
probably have a totally different mindset than I do when it comes to
cryptocurrency.

~~~
tudorconstantin
I guess it's less stressful once you're at 100x ROI in a few short years to
see your ROI at "only" 70x.

~~~
mamon
I don't know - people get attached to their belongings pretty quickly. In your
example, if you invested 1000 $ in Bitcoin, watched it grow to $100k and then
back to $70k then you would feel like you lost the cash equivalent of brand
new car. It would be very painful, despite the fact that original gains came
so easily.

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redm
It's going to be really interesting to see what happens when Ethereum becomes
the most valuable coin. It seems to have the momentum. [1]

[1] [http://www.flippening.watch/](http://www.flippening.watch/)

~~~
donquichotte
Or Stellar, with transaction times in the second range and Stripe behind it.

~~~
fragsworth
Stellar is not a cryptocurrency. It's only partially decentralized (like
Ripple) - there is no blockchain, it works with a series of trusted nodes.
That makes it very easy to have fast transactions, but also makes people not
very confident in it.

~~~
anothercomment
Also, they make me sign in with Facebook to claim Stellar (in their latest PR
campaign). No.

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emodendroket
Nothing says "stable store of value" like wild fluctuations in exchange rates.

~~~
rgbrenner
Is anyone expecting stability? According to the chart, it went from $1000 to
$3000 in 2.5 months.

~~~
1001101
Lots of weak hands in it right now. More scaling debates, ominous US
legislation, Goldman Sachs says it looks "heavy." I got out recently - for me
it was the disposition effect [1], but shortly after, one of the more
compelling global macro voices that I like to listen to, Raoul Pal, announced
that he sold his stake. Makes me bearish long-term. Raoul's reasons were based
on the malleability of the protocol and specifically that more than 21M
bitcoins can be created at the whim of developers.

[1]
[https://en.wikipedia.org/wiki/Disposition_effect](https://en.wikipedia.org/wiki/Disposition_effect).

~~~
Rmilb
In what scenario would it be in anyone's interest to raise the maximum total
of coins to be created?

~~~
serhei
Hypothetically, if miner profits went into freefall, the alternatives would be
to raise tx fees even further (making the network less usable), or to change
the protocol to mint more coins. You are correct that the latter would
massively discredit the project's original goals, and is therefore unlikely
(since it would damage the value of the currency).

The network relies on having a large ecosystem of miners to prevent anyone
from mounting coordination attacks. Those miners are paid either by new
bitcoins (out of the finite supply), or by tx fees.

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lwhalen
Oh good, it's on sale now...

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lettergram
I actually just sold my stake in Ether and Bitcoin two days ago (happy I did).
Still holding onto Litecoin however.

A few friends and I also wrote an application to help us invest. We just
launched a beta:

[https://projectpiglet.com/](https://projectpiglet.com/)

If anyone's interested, feel free to reach out to me directly: contact-at-
projectpiglet.com. We just launched it so it's pretty rough, so we're in a
beta testing phase. Thus, we are providing the service for free, provided you
fill out a feedback form once a month.

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Animats
The price tripled since March, for no good reason. Up from $1000 to $3000, now
back to $2000. That's still quite a gain.

The fork issue makes it clear that the future of Bitcoin is controlled by
about five mining companies in China. Could be worse; at one point two
companies had more than half the hash rate.

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psyc
How are they getting 40%?

~~~
mikeash
You get about 40% if you divide the fall in the price by the _current_ price.
Is there some weird convention in finance to do it that way?

~~~
kcanini
It's ridiculous... if it had dropped from $3,000 to $1,000, would that be
called a 200% drop?!

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biggodoggo
Is the bitcoin bubble finally popping and will ethereum pop with it or get
bigger?

~~~
orclev
Watching the fluctuations of BTC, ETH, and LTC they seem to be fairly strongly
correlated with each other, at least over the last ~month or so, and
increasingly so coming to the present time. It will be interesting to see if
in the coming weeks and months they continue to track closely to each other or
if they once again diverge.

~~~
yebyen
Watching trends without an analytic platform, I have seen that over any period
of time longer than ~1 day, ETH seems to perform better. It is common to see
periods of an hour, up to a day, where BTC does perform better. (For this
reason, not more than just a few weeks ago, I took most of my tiny collection
of BTC blue chips and traded them in for ETH.)

It would be hard to believe that nobody has tried writing arbitrage bots. I
would probably be overreaching to say that this effect is due to a large
number of arbitrage bots (and likely also non-robots), but it seems like there
are clear opportunities for arbitrage and likely that there are skilled
individuals taking advantage of these chances on the regular.

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bpodgursky
I'm bearish on Bitcoin long term, but I have to admit it's crazy seeing
Bitcoin at $2200 after being 25% _off_ peak.

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0x4f3759df
I was trying to think of what will stabilize the price, and the best I could
come up with is that on a long timeline it should be approximately equal to
the amount of money it costs to mine a new one, or get one out of transaction
fees. Anyone have a better idea?

~~~
UweSchmidt
Imagine it would cost 10$ to produce 10$ (imagine all money would have to be
real paper bills and those would be really expensive to make).

Certainly this does not work - all economic activity would be spent to make
the money bills, and no activity was done to produce food or build the power
plants that are busy producing energy to calculate the next "coin".

So the price of Bitcoin may be related to mining costs in the short term, as
miners quit when it gets too expensive. Ultimately the price would have to be
much lower to be practical, or higher if it turns out Bitcoin becomes highly
useful for something. Or Bitcoin takes over the world and replaces all other
currencies - then the 21 million Bitcoins would equal the entire human wealth
- if you believe this then you should buy right now.

~~~
dr_win
> "So the price of Bitcoin may be related to mining costs in the short term,
> as miners quit when it gets too expensive."

This is wrong. Supply does not decrease when mining gets too expensive and it
does not increase when mining gets cheaper. This is the very special property
of Bitcoin. See my other post.

> "then the 21 million Bitcoins would equal the entire human wealth"

Not necessarily. There are lost coins. And likely not all remaining coins will
participate on the market. More precisely bitcoins supply offered on the
market times velocity would be equal to the entire wealth offered on the
market.

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SeeDave
I've become increasingly risk-averse after realizing how devastating a 50%
decline really is. Independent of asset class, you will need a 100% gain to
get back to where you were. And that will take a while.

Regardless, and apologies for the dumb BTC meme, I am HODLING!

~~~
sevenfive
> I've become increasingly risk-averse after realizing how devastating a 2^-1
> decline really is. Independent of asset class, you will need a 2^1 gain to
> get back to where you were.

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hackefeller
I do not fully understand the cryptocurrency domain but have always wanted to
gain a better understanding of it so am hoping for some insight. I thought
that one advantage of Bitcoin was that it cannot lose value?

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afterburner
What, its value in dollars? Its value in dollars is however many dollars
someone is willing to pay for it.

~~~
test6554
An extremely large number of people do not understand this... Take for example
people who want to buy a nintento switch for $299. But it's $415 and in stock
on Amazon and sold out everywhere else that is listing it for $299. Well I
guess it doesn't actually cost $299 then does it? It actually costs $415 or so
based on what people are willing to pay.

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yueq
Usually -20% from highest price is considered as a bear market.

~~~
ceejayoz
In Bitcoin, it's considered a day that ends in Y.

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nickthemagicman
To put it in context though...it was $1000 like two months ago....So even with
the crazy drop it's still gained 100% in two months...

