
Bitcoin drops 50% overnight as China’s Biggest BTC exchange stops Yuan deposits - linux_devil
http://techcrunch.com/2013/12/18/bitcoin-drops-50-overnight-as-chinas-biggest-btc-exchange-stops-deposits-in-chinese-yuan/
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sergiotapia
The /r/bitcoin subreddit has a suicide hotline disclaimer stickied to the top.
Yikes.

[http://www.reddit.com/r/Bitcoin/comments/1t5ofu/please_stick...](http://www.reddit.com/r/Bitcoin/comments/1t5ofu/please_sticky_usa_suicide_hotline_1800273talk/)

~~~
bsirkia
Yowza. I guess it's true that the majority of people investing in Bitcoin saw
it as more of an quick-flip play than a long-term value investment.

~~~
atwebb
That sub is about as volatile as the currency itself. Though some people
mentioned buying bitcoin on credit and that could put you in a pretty bad
situation.

~~~
corin_
No worse than buying material goods on credit, which a huge number of people
do. If anything it's less bad, as at least with a gamble you might get the
money back to pay off the credit. Of course, whether you value a TV or a
chance of getting rich more is subjective.

edit: I stand corrected, good points below. But it is still very possible to
use credit to speculate without it being a huge problem, e.g. if you could
afford $x over 3 months but think you need to spend it all now to see the
benefits then the slight interest on the credit just becomes part of your
risk, but doesn't mean you'd be in trouble if it doesn't work out, other than
losing money which is a risk regardless.

~~~
atwebb
Most material goods are bought with the knowledge that their value will
depreciate significantly and quickly. Investments are not seen that way so
people will, foolishly, bet money they don't have and a good indicator of that
is putting it on plastic.

------
Houshalter
In other news the United States Dollar has almost doubled in value in a single
day: [http://www.coinion.com/2013/12/07/united-states-dollar-
almos...](http://www.coinion.com/2013/12/07/united-states-dollar-almost-
doubles-in-value-in-a-single-day/)

~~~
maratd
Ha! The story is of course a jest, but there's no reason why you can't look at
it that way. A cup is either half empty or half full.

~~~
jbooth
There are as many reasons as there are other things in the world besides
bitcoin why you can't look at it that way.

$/yuan, $/euro, $/big mac, $/potted plants, $/dinner at applebees...

~~~
Houshalter
No, it's just that those things also doubled in value.

~~~
jbooth
Touche, sir

------
pistle
The cognitive dissonance is magic. You couldn't fake the tragic similarities
to the dotcom crash. People yelling "hold for long!" with people raining down
and everybody having a little voice inside their head saying, "I'm smart. I'm
sure I knew the risks better than the next guy. I read the forums. I got this
computer. This is it. 50% down is nothing."

Then when nearly everything was 95% down and liquidity was drying up because
the bulls had all been beat into puddles in the street... everything went back
to normal. And we did it all over again.

It doesn't matter if you write the history and they read it. Human nature is
to be dragged into these things. Recognize the pattern. Look for the short.

------
warfangle
Buy btc when it's low, buy things with btc when it's high :) If you're trying
to invest in it like a forex trader without adding liquidity to the market
(e.g., buy-n-hold), you're part of what drives these bubbles in the first
place..

I treat these bubbles as periodic shopping sprees. I bought a bunch of
e-cigarette stuff and a few christmas presents during this bubble. (and I
still have more $us worth of btc than what I spent on the original btc).

~~~
oskarth
Buy low and sell high? What a brilliant strategy.

EDIT: If you think you've found a sure-fire way to beat the market, you are
probably wrong. That or you are doing insider trading or high-frequency
trading (arbitrage).

~~~
warfangle
Ah, except I'm not trading for cash. I'm trading for something that means more
to me than cash (which I would have used cash to purchase anyway) :) What the
merchant does with it afterwards, on the other hand.

And I'm not in it to make a fast buck. I'm just using it for occasional vanity
purchases. I don't like treating a volatile commodity as a forex investment..
just doesn't seem wise. If it crashes to <$1/btc, I'll be out like, a hundred
bucks. So what?

~~~
Johnie
What's the difference between what you are doing and selling btc for cash and
using that cash to buy stuff?

The only difference is that you are forced to buy things at a certain time
rather than keeping it in cash.

The underlying transaction is the same.

~~~
warfangle
> forced

No, not really. It just changes my strategy on which currency to use when I
want to buy something.

------
dcc1
It rebounded back to almost same level

[http://bitcoinity.org/markets/bitstamp/USD](http://bitcoinity.org/markets/bitstamp/USD)

% change 24hrs, -10% at time of this post

~~~
edias
From my brief observation of bitcoin this seems to be the defining
characteristic for bitcoin, crashes followed by rebounds, pretty much since it
was created, making me believe that most of bitcoin usage is speculation (is
that already confirmed?).

Anyway, the question that keeps me from investing a dime into bitcoin is "What
if it doesn't rebound?". If it really is being used as an investment vehicle
and not a currency, than the answer to that, in my opinion, is eventually it
will drop and continue to drop to the point where it's worth pennies on that
dollar. With the boom and bust nature, I suspect many people will eventually
just give up on it as a currency which would be close to a death sentence for
bitcoin.

I am heavily biased towards index funds with the lowest fees so I'm rather
pessimistic about bitcoin in general, just like I am about playing the stock
market. It would be interesting to see what would happen if banks started to
care about bitcoin. The market needs to grow many times over but I would
expect them to be the only people making consistent money (and not even
sometimes) just like they do on the stock market.

~~~
ihsw
There faster, more efficient ways to cause your hair to turn gray and fall out
than watching BTC's waxing and waning on an hourly basis.

Personally I suggest looking at the 52-week moving average -- it's a lot more
comforting and a lot less stressful.

------
chadkruse
I wonder how many Finance professors just opened up their Investment 101
lecture deck and added a new case study under the Risk/Return slide. I think a
lot of investors and speculators just got reminded of regulatory risk.

That said, the MBA professors are updating their case studies for Regulatory
Arbitrage...outcome tbd:

[http://en.wikipedia.org/wiki/Regulatory_arbitrage#Regulatory...](http://en.wikipedia.org/wiki/Regulatory_arbitrage#Regulatory_arbitrage)

------
Zarathust
At least it shows where the bitcoins are used

------
bhartzer
I'm still in it for the long haul. I'm sure it will go back up at some point.

------
kyledrake
The reaction to all of this is completely ridiculous, because it lacks good
context.

Bitcoin is still up around 444% if you look at the chart from six months ago:
[http://bitcoinity.org/markets/bitstamp/USD](http://bitcoinity.org/markets/bitstamp/USD).
It's still one of the best investments of the year, if you compare it to
pretty much everything else (the stock market, gold price, options, housing,
oil, you-name-it). When the fed tapering program begins, I think we are going
to see a similar (though probably not as drastic) drop in the stock market as
well, which I also believe to be overinflated. That hits a lot of people too,
most of whom have their retirement funds built on it. It's just the nature of
investing, which I have a lot of trouble at times isolating from the idea of
gambling.

The real lesson here is that if you're just trying to get into Bitcoin to make
easy money, you're going to be disappointed. People should be hesitant of get
rich quick schemes in general, and in altcoins in particular. When friends and
family ask if they should buy Bitcoin, I immediately warn them that getting
into Bitcoin solely on price increase speculation is akin to gambling or stock
investing and should be treated as such. As Roger Ver said, Bitcoin's price is
the least interesting thing about it. What excites me about Bitcoin is the
ability to control your own purchasing power, and not require a central system
(bank, payment processor) to manage and send it. Bitcoin is still at an
incredibly early stage in its development, and like anything, there is a lot
of uncertainty now, and to come.

It's not my intention to gloat, but I want to give you a positive story
against all this. I sold enough of my ownership of Bitcoin at about $950/BTC
to pay my usual salary in USD for an entire year, which will allow me to work
on Coinpunk and Neocities full-time, and have some extra funds to pay people
that help me work on it. I have never had this opportunity in my life, and I'm
really excited about it. It's like getting angel investment without the
investor, and it gave me complete autonomy to do for the project what I feel
is right. For me (and for people that were sensible about it), it's been a
very good year.

My prediction is that the China situation is going to get sorted out
eventually. But sure, until that happens, the value of Bitcoin has fallen
because of concerns about liquidity. If the US banned the ability to exchange
dollars, I imagine you would see a similar drop in its value as well. And it's
looking like most countries are invariably going to not ban Bitcoin. The US
hearings in particular were quite positive. If China's government decides it's
done with Bitcoin, it just means that other countries will have the
opportunity to become the leader in Bitcoin startups. And that's also a
positive thing for me ultimately, but sadly, not as much for future
entrepreneurs in China. As someone that works on startups for a living, I
would always rather have a level playing field than be given an opportunity
due to a punitive effect.

~~~
lectrick
I love the idea of Coinpunk.

And I wish I could contribute, but I'm so jaded and scarred by Javascript at
this point it's not even funny. (For context, I spent a lot of time debugging
JS on Internet Exploiter in the early 2000's long before anything cool and JS-
related existed, and I do Ruby now.)

Can you do me a huge favor, though (and I'd be happy to toss you an entire
bitcoin if you simply promise to do this): You NEED a better test suite.
You're writing software that deals with money (or "a money," whatever), it
_absolutely_ needs a robust test suite. Primarily unit tests, but also a few
functional tests. For both the server-side AND client-side code. Bitcoin
itself has a reasonably good test suite, yours should too. I REALLY doubt
Blockchain.info has a good one. You could distinguish yourself this way while
also covering your own ass in the event you need to refactor things without
breaking things :)

I didn't think tests were fun to write until I realized how much time they
were saving me in debugging and headaches after the fact. Do it now, before
your code size gets much bigger.

I highly recommend this book [http://www.amazon.com/Growing-Object-Oriented-
Software-Guide...](http://www.amazon.com/Growing-Object-Oriented-Software-
Guided-Tests/dp/0321503627)

Again, happy to order it for you (it's not cheap) or just toss in some more
BTC if you promise to order it and read it.

I don't know what cred I can give you other than to tell you I'm
"GSpotAssassin", a well-known big tipper on /r/bitcoin. (I got into bitcoin
very early, and I'm an open-source developer.)

Anyway, congrats on your self-funded expedition, that is pretty fucking rad
and I expect big things. :)

~~~
kyledrake
Thank you for the feedback! I agree, improving the testing suite is definitely
a high priority and high on my list.

------
rf1331
Can we finally stop listening to the Winklevoss twins now?

------
dlsx
Dogecoin 50% gain only alt coin to post gains in 24 hours.

>reddit and 4chan

Well looks like the internet has decided what coin they want to use.

Buttcoins are deprecated.

~~~
vezzy-fnord
I'm still shocked how a dumb meme-based altcoin gained so much popularity,
where all other just as boring and generic Bitcoin forks died down or are
completely insignificant.

To their credit though, they based it off of Litecoin... making it a fork of a
fork.

Either I have no sense of humor, or we aren't going to be seeing October 1993
any time soon. Can't wait for "Latvian Potato Coin" to appear in the future.

~~~
dlsx
Your shocked because your old and have no sense of humor and think money is
serious business.

Dogecoin has the fastest rate of adoption, of any crypto-currency. Ever,
period. It makes every coin, even bitcoin look like an absolute failure.

Because it's fun, and kids think it's cool. You guys missed the boat, because
you were too busy being serious.

~~~
NotUncivil
Cut it out. You are trolling. Your reference to "buttcoins" is a good
indicator you're from /g/ and this isn't /g/.

Edit: FYI,
[http://rbt.asia/g/?task=search2&ghost=yes&search_text=dogeco...](http://rbt.asia/g/?task=search2&ghost=yes&search_text=dogecoin&search_op=op&search_del=dontcare&search_int=dontcare&search_ord=new&search_capcode=all&search_res=post).

------
AznHisoka
who cares? Nobody owns it anyway.. This is what I don't get. They say only
1000 ppl own Bitcoin. So why the popularity? I mean who cares if those 1000
ppl get rich or lose all their money?

~~~
Avalaxy
1000?! Where did you get that number from? Coinbase has 650.000 users alone...

~~~
aquateen
There was some headline about a week ago that said roughly 1000 people own
half of all bitcoins.

~~~
Avalaxy
True, but the total amount of bitcoin owners are in the millions. AznHisoka
stated that only 1000 people own bitcoins, which is simply not true.

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simonebrunozzi
I am not an expert in markets or finance, but this is my observation: a lot of
inexperienced people owning BTC will sell when they see these sudden drops;
experienced investors will be there, reaping the benefits and buying BTC at a
"discount". It wouldn't surprise me if BTC will go back to 1,000 US$ and
beyond just in a matter of weeks.

This is NOT an investment advice, but I would buy some BTC now that the price
is at approx. 600 US$, and keep it for a few months at least.

~~~
justincormack
You are not an expert, that is not advice, but you advise people to buy it at
some arbitrary value? Thats one of the many things wrong with bitcoin, all the
stupid people talking shit. Classic bubble signs.

