
Bitcoin Drops Below $8,000 as Cryptocurrency Pain Continues - adventured
https://www.bloomberg.com/news/articles/2018-02-02/bitcoin-drops-below-8-500-as-cryptocurrency-misery-continues
======
vivan
I say this unironically: this is good for Bitcoin. In my opinion, the best
time for Bitcoin was when it was sitting at around ~$1000, where fees were
low, transaction times were low and acceptance was high.

Bitcoin was a great currency for online transactions back then. Once prices
skyrocketed as they did, it lost the ability to function as "Internet money"
because it was simply too expensive to use. Fees are high, transactions take
hours, and a lot of the companies that famously accepted Bitcoin (Microsoft,
Valve) no longer accept it. As someone who regularly made purchases with
Bitcoin before the ridiculous growth, I'm hopeful for a return to those times.

~~~
jasonsync
Yes, I think most early Bitcoin supporters would agree that things were much
better when transaction fees were low and confirmation times were fast.
Bitcoin is worthless if the underlying utility is broken.

It's unfortunate that the community wasn't organized enough to come a
consensus on "scaling" ...

It was only a few months ago that it appeared as though the possibilities were
endless. We had excellent "long-term" solutions in development (Segwit and
Lightning) AND a good "short-term" fix ready to go (Blocksize increase).

As an early adopter I feel betrayed, that we were forced to choose a side,
that politics trumped usability. It's toxic. Self-limiting, and difficult to
"buy" into at this point.

~~~
andirk
The block increase was looked down upon by many, probably the more technical
minded, because we were taught that simple constants in equations (block size
of 1,2,8...) are not as important as the exponents. However, a 2MB increase on
something that was probably arbitrarily 1MB seemed like a fine middle ground
until Lightning Network. Then again, hard forks are no fun.

------
cousin_it
Bitcoin affects global welfare in three ways:

1) Positive sum: facilitate buying goods and services

2) Zero sum: move money from later to earlier adopters

3) Negative sum: warm up the planet

Right now (3) is destroying much more value than (1) is creating. Moreover,
all trends show that (1) is falling and (3) is rising. So it would be better
for mankind if Bitcoin didn't exist. Regulation is probably the best way to
achieve that.

~~~
xya3453
While facilitating buying goods and services is a positive, the largest
benefit to global welfare is in the invention of the blockchain.

~~~
cousin_it
That's not a consumer benefit in itself, but rather a cause of (1)-(3) and
other possible effects in the future. It might well be negative in the end.

------
alkonaut
ETH is also dropping pretty sharply today, -30% over 24h, at $800 now.

Question for those who know: what is the current break even price for ETH
miners using GPUs? At what point does one take that GTX 1070 rig and either
sell the parts or move to another currency, given the current mining
difficulty?

~~~
singularity2001
any explanation why the price is _so_ closely coupled?

~~~
chatmasta
Probably a few things:

1) Largest mining operations are mining multiple currencies

2) The initial "whales" of ethereum were BTC early adopters diversifying
holdings

In general it seems the price of BTC is almost always a proxy for the rest of
crypto, most likely because any crypto portfolio has a significant amount of
BTC in it.

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matt_s
The tech is interesting and the ideals of a currency not aligned with a
government or big bank are nice but cryptocurrencies have no real value.

Essentially, they are a verifiable ledger of anonymous people exchanging
bytes. They may have paid for those bytes with a real currency, much like
someone paid for tulips some time ago, or they may have won them for verifying
something on the ledger.

Some people in the tulip craze actually had tulips though, right? If a
cryptocurrency falls to $0 USD exchange then all that is left is a digital
ledger.

"At the peak of tulip mania, in February 1637, some single tulip bulbs sold
for more than 10 times the annual income of a skilled craftsworker" [1]

I wonder if time of year plays into the psychology of this.

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

~~~
luke3butler
This might be beating a dead horse, but what's the difference between Bitcoin
and gold then?

If gold loses its value, then it's just a heavy rock. They both take time,
money, and resources to mine but neither of them have any intrinsic value.

~~~
cglace
Gold has a myriad of uses outside of it being a heavy rock. If it's price were
to drop substantially it's use in industry would increase substantially and we
know what happens to price when demand increases.

~~~
soneil
I don’t think industry is the floor you think it is. They’ll happily pay as
little as they can for it.

I think the more honest measure is simply how many people have faith in it.
Bitcoin and gold may be logically equivalent for this function, but a lot more
people have a lot more faith in gold.

~~~
cglace
Anyone will happily pay as little as possible for anything. I don't see your
point.

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rpeden
Ouch. This wasn't unexpected, but as much as I'd like to revel in
schadenfreude here, I can't do it in good conscience because this is going to
hurt a lot of good people who were naive and got caught up in the hype.

I remember seeing the news circulating in the Canadian media about the couple
of spent their life savings on Bitcoin mining ASICs [1]. Even though they'd
should've been way more cautious, I don't enjoy seeing people potentially get
wiped out.

[1] [http://www.cbc.ca/news/business/bitcoin-mine-
canada-1.443614...](http://www.cbc.ca/news/business/bitcoin-mine-
canada-1.4436149)

~~~
adventured
Makes me think of this Dutch family that was in the news back in October:

"Didi Taihuttu, his wife, three kids and their cat bet all they have on
bitcoin. The Dutch family of five is in the process of selling pretty much
everything they own — from their 2,500-square-foot house, to their shoes – and
trading it in for the popular cryptocurrency. They have moved to a campsite in
the Netherlands, where they're waiting for bitcoin to really take off."

[https://www.cnbc.com/2017/10/17/this-family-bet-it-all-on-
bi...](https://www.cnbc.com/2017/10/17/this-family-bet-it-all-on-bitcoin.html)

~~~
thesmallestcat
Natural selection at work.

------
BrandoElFollito
This is a great learning experience for my 11 yo son.

He wanted me to buy him bitcoins because it was cool. Initially he wanted to
put all his savings, I talked him into just a bit. He invested 13 €. He got
the double.

He wanted to invest all his savings again. I talked him into just a bit. He
invested 30€,got 50€.

He threw in 80€ (of a total of 137€ of savings) when the rate was 12k.He now
lost almost half by, and learned a lot. About being careful, what a rate is,
how money works (at his level).

Now I hope that it will be 12k again so that he gets the money back :)

But not something like 100k because I did not actually buy the bitcoins but
merely acted as the bank...

------
albertgoeswoof
CryptoCurrency reporting is dire. Take the quotes from the research analyst in
this report:

"Bitcoin is in trouble" \- with who exactly? Miners? gfx card manufacturers?
People forgetting their wallet passwords? Speculators panic selling?

"Price action suggests that bears are clearly in control, with further losses
on the cards" \- Price action? You mean the numbers on the chart have gone
down so maybe they'll go down some more? Who are the bears? Why can't you
point to transactions on chain?

"jitters over regulation" \- what jitters? wtf is a jitter? Who is jittering?
Who are the investors not investing any more?

It's all fluff!

~~~
cowmoo728
Welcome to the world of public financial analysis. No one wants to publish
real research because they can sell it or use it instead, so almost by
definition, any analysis found on the internet or given to journalists is
useless fluff.

------
chatmasta
I'm already seeing non-technical friends (who are not exactly rich either) on
FB posting all sorts of mental gymnastics about this. People are going to get
hurt.

~~~
sitepodmatt
Stuff like HODL? To the moon? Stupid memes about the strong don't sell?
Reality is most of these speculators haven't got a clue as to the utility (or
lack of) of the coins they "hold" in the exchanges, the butthurt is well
deserved.

[https://www.youtube.com/watch?v=DgRLlqEvOT8&feature=youtu.be](https://www.youtube.com/watch?v=DgRLlqEvOT8&feature=youtu.be)
(someone posted this on reddit which captures the scene pretty well)

------
szczepano
It's going up/down because financial institutions are cashing their earnings
using contracts. I thought it's obvious they want to destabilize
cryptocurrency as it's threat to their business model and it's same threat to
the capitalistic culture nowadays. When they fail or get bored they might
force IMF to ban cryptocurrency exchange for national currency. As always
banks would suck your money :)

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seanalltogether
The hype, the bubble, the pop to me all look like it did back in 2013-2014.
That took a full year to eventually bottom out. Obviously there is way more
money in the markets now and things have matured somewhat, but it's not
unreasonable to assume it will take a while for the dust to settle on this
one.

------
imhoguy
What is the current mining profitability threshold for BTC?

~~~
DSingularity
5kish

------
thebiglebrewski
If we go with the thesis that crypto is here to stay and that two or three of
these coins will be here in five years, which coins would you put money in
with today's price drop?

~~~
sethgecko
BTC, ETH, XLM, XRB

~~~
thebiglebrewski
You still think BTC will have value in 5 years with everyone abandoning at as
a payment method?

Also why do you believe in XLM and XRB? Just curious. They do have a very low
price per coin so perhaps they'd appreciate?

------
jatsign
What's interesting to me about this dip/pop is that the money isn't rushing
into Tether (USDT). Normally in a dip people sell for USDT, which drives up
the price of USDT over $1.

But right now Tether is at $0.97. It seems that the money is flowing back into
fiat (as there's no other obvious place for it to be going).

Perhaps people have finally figured out what a scam Tether is.

~~~
Mtinie
I hope so. The sooner the general narrative shifts from “USDT is a valuable
hedge in a down market” to “USDT’s structure doesn’t make a lot of sense, and
it’s risky to use” the better.

If it’s going to implode, I’d prefer it happened now, rather than to have the
crypto asset markets reach a point of consolidation and rebound, only to be
clobbered again when USDT issues inevitably arise.

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singularity2001
market manipulators just pushed the course up over 10% in 20 minutes. Forgive
my English: this is coco-banana.

------
zerostar07
so, unless coinbase reports some record breaking cash-outs , this is probably
price manipulation , right ?

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empath75
Until the tether/bitfinex situation resolves, I don’t see a bottom.

~~~
gressquel
the thing is, tether/finex was instrumental in keeping up the hype during the
great rise where every news outlet reported it. It was also what kept bitcoin
from falling too fast after reaching top. Now as its been subpoenaed, things
are looking grim. But I do think it wont fall paste 3000$

------
mavdi
It's actually a great time to buy in. We've seen way worse than this in the
past, and we have always recovered. I have buy orders at $6500.

~~~
prklmn
It’s been a great time to buy every day since the market peaked, according to
_experts_.

~~~
mavdi
I'm not an expert, but I'm still up 20,000% in USD. Once I start making a
loss, I'll listen to what you have to say.

~~~
piva00
You have been lucky, not smart.

~~~
mavdi
Neither lucky nor smart. When the technology came out, I put the work in,
studied it, realised the potential and invested what I could afford to lose in
it.

Calling us lucky is very condescending, but I really don't mind it with my
current bank account balance. Cheerio

~~~
piva00
A lot of technologies have potential but die out from a whole bunch of
executional problems, you were lucky that Bitcoin didn't, just like any
investor in high-risk investments is. There are no fundamentals to analyse
Bitcoin and there were even less back in the beginning, you made a bet and got
lucky, that's about it.

I'm glad your bank account balance is healthy but again, you just made a bet,
don't try to sell like there was a proper analysis that was in any way close
to a scientific method to go through.

Cheers, enjoy your money, I don't care about how much you have, don't be smug
about it.

