
Bitcoin crashes over 25% in 24 hours, under $180 - TylerE
http://bitcoinity.org/markets
======
tribaal
Yeah, as much as I like the concept of bitcoin (and the blockchain), I don't
see adoption becoming anything more than anecdotal.

No interest rate, and you have to secure it yourself? No thanks. My "big bad
bank" guarantees me at least a small interest in saving money, and if my card
is stolen, I get a new one in 24 hours and all transactions are cancelled. I'm
happy to pay some transaction fees ("extortion!") to get that kind of
insurance.

Bitcoin is the electronic version of "let's buy a lot of gold and stash it
somewhere".

EDIT: Burn karma, burn. Ah well.

~~~
honeybooboo123
I don't own any bitcoins, but felt like pointing a couple of things out.

Whatever shreds of interest your bank gives you will be way, way less than the
inflation you're experiencing. In other words, your money's purchasing power
keeps decreasing even if you're getting some interest on it, ie. you're losing
your wealth.

Bitcoin doesn't experience inflation like that, so it should be a better store
of value than your fiat currency. I said "should" because bitcoin has been in
a speculative bubble, and just came down even more. Right now it's still just
a speculative asset, but it _could_ serve as a stable currency.

Your card is irrelevant.

Transaction fees are not extortion. They're a massive skimming operation
inflicted on the masses, because the masses have no choice but to eat them.
Thank your state-maintained bank cartel for that.

~~~
redthrowaway
There are no grounds to say that BTC should be a superior store of value.
Aside from its very public history of being an absolutely _abysmal_ store of
value, it also has no central bank tending its value, as fiat currencies do,
and no substantial trade denominated in it, which is what gives fiat
currencies value in forex markets. It is _solely_ a speculative vehicle. It
sucks at commerce and it sucks at investment.

Bitcoin's sole value as a currency lies in its ease of use as a back-end for
transactions. It's not a bad intermediary for transactions between people
using different currencies, provided the third party transaction service has
legal, fast, and cheap ways to convert to and from fiat in both countries. But
then, it's not so much a currency as a transport layer with added uncertainty.

I've yet to see a compelling case for BTC as anything but TCP/IP for dollars
or a wayback machine for anything you want. It's bad for savings, god-awful
for investment, and useless for [legal] commerce.

~~~
derefr
I think you're attacking somewhat of a weak-man: the people saying Bitcoin _as
it is valued right now_ is any sort of store of value (and there are, indeed,
such people) are obviously slightly insane.

But in a long-term sense—an imagined future where all the speculative value
has gone out of Bitcoin and it is now just "worth what it is worth"—it would
make a fairly good store of value, in exactly the same way gold would if we
knew exactly how much of it there was to mine out of the earth, if some
property of the (never-changing) extraction process meant that it was only
able to be mined out at an exactly inverse-exponential rate, and if it were
very easy to handle the resulting gold in 0.00000000001g pieces.

~~~
redthrowaway
A store of value must be such over any given timeframe. If the balance in your
savings account is worth $100 today, $50 in three months, $150 in six months,
and $75 in a year, then it is a terrible store of value -- regardless of
whether it's worth $200 two years from now.

Similarly, talking about imagined futures is not a convincing way to defend a
currency as a store of value. If you have to posit that your money will still
be there iff A, B, and C are true, then you're not going to park your money in
that particular stall.

~~~
derefr
I'm not saying people should be putting money into Bitcoin now because they
should assume A, B, and C will be true.

What I'm saying is that there's no reason to assume that you won't see
Bitcoin's value stabilize e.g. ten years from now, and Bitcoin _become_ a
useful store of value from that point forward.

Or, to put it another way, just because the Bitcoin that exists today is a bad
store of value, doesn't mean that "Bitcoin is a bad store of value" is an
immutable fact about Bitcoin. It could just be a fact about _today_.

~~~
redthrowaway
Well, sure. PHP could also become a nice language to code in. Neither outcome
seems likely, given what we've seen in the past.

------
sanswork
Not really surprising. 2014 was meant to be the year of bitcoin and it flopped
as far as the general public was concerned. Bitcoin picked up some more
merchants but they almost universally saw disappointing sales or dramatic drop
offs(Overstock the poster child which at one point was claiming serious
expectations of $15-20m in bitcoin sales ended up with a 5th of the lower end
of their claim).

Mining companies are closing left, right, and centre, and bitcoin exchanges
are shutting down for more profitable ventures.

I don't think Bitcoin is dead or even close to dead but I'm pretty sure we've
seen its peak.

Unlike the previous bubbles this one was in full sight of the general public
with constant media coverage. It's gone to $1000 had most people(in western
nations) learn about it and respond almost unanimously with 'Meh'.

~~~
xorcist
"Was meant to be" amounts to your own view. The software isn't even called 1.0
yet, and the core developers all say the important applications are a couple
of years away.

Yes, Bitcoin was probably hurt by the mania surrounding $1000. Had it gone to
$180 from $30, without the spike, there would be calls of tulip mania instead.

Is it too early to build applications on top of Bitcoin? No, I don't think so,
some wants to be in early. But to call "the year of" on what amounts to beta
software and VC backed startups is a bit much.

~~~
bdcravens
_The software isn 't even called 1.0 yet_

Neither is node.js, yet tons of successful startups run on it.

For years, Gmail was still "beta". If it had a major security leak, "it's
beta" would mean little. It would still qualify as a failure.

~~~
easytiger
> Neither is node.js, yet tons of successful startups run on it.

It will get them off the ground. Then they will need to start rewriting a
backend pipeline in something fast and predictable.

------
heyimwill
On December 23 a Missouri court ordered a winddown of Butterfly Labs and they
began a refund plan.....now here is my theory...I was looking at the
blockchain and came across a 5000 btc utxo taken incrementally down to 0....it
was sold off continuously. It took me to here.
[https://blockchain.info/address/12WRnQR85ZUT7dhmaHBNL5dde2QL...](https://blockchain.info/address/12WRnQR85ZUT7dhmaHBNL5dde2QLYieW6v)

Activity on that address started back up on 12/23 the day the courts provided
control again. Ive tied it to butterfly labs because a OP_RETURN said
paycoin.com linked to Josh Zerlan an employee of butterflylabs.

What is scary is another 90000 unspent coins reside here also controlled by
butterfly labs.
[https://blockchain.info/address/1B9KrM7bjhJ42qJSWr1KJrNTAP1S...](https://blockchain.info/address/1B9KrM7bjhJ42qJSWr1KJrNTAP1SNGMpJu)

I think youll have butterfly labs forced to continue to sell the remaining
94000 coins in this court mandated wind down in order to provide refunds to
those customers....That is a ton of coins to continuously dump...it exceeds 24
hour volume on the largest exchange.

~~~
rasz_pl
Gee, almost sounds like Butterfly Labs was a scam on top of bitcoin scam. Sell
preorders for a money printing machine, build said machine, and sit on it
printing money for yourself.

------
jokoon
Does it really matter ?

Wouldnt it smarter to use bitcoin as a secure way to make payments, but not to
keep as a currency ?

For example, if you want to buy something using bitcoins, you just buy the
exact amount of bitcoins you need, you make the transaction, and the people
who gets the bitcoins just convert it back to dollar.

To escape the fluctuation of the conversion rate, just open a bank that keeps
amount in dollar and only do transaction with a corresponding amount of BTC,
depending on the conversion rate. It's an easy way to diversify payment
alternative, while being pretty safe and avoiding fluctuations of BTC.

I don't see any other way to use bitcoin. It's pretty hairy, but it might be a
viable alternative to paypal for example.

~~~
pjc50
You incur two sets of transaction fees and bid/offer spreads, so it's quite a
pricey way of doing a transaction. And you lose any prospect of getting your
money back in the event of a dispute.

~~~
jokoon
At least there's more competition possible between people who sell BTC. right
now there's only paypal.

------
btcthrowaway2
I mined about 200 BTC in 2011 and I must say, they have changed my live. I
still have 150, so during the passed 4 years, while bootstrapping 2 startups,
those mere 50 bitcoins I sold have meant that I have been able to keep both
companies running. Without those 50 coins, I'm not sure how I would have
continued.

But the most important thing was not the value of those 50 coins. Which really
isn't that big a deal. It was the knowledge that "I have a buffer, a reserve"
and that knowledge has allowed me to make deals in the interest of future
growth, instead of short term continuation. I got to decline offers, that I
otherwise would have needed to survive.

Now that both companies are making a profit, I have learned how important it
is to have a big buffer and I thank Bitcoin for that. I also thank Bitcoin for
the financial independence I now have, even though it is an indirect result.

I still watch the markets and hope some other honest hardworking guy out there
gets as lucky as I got.

~~~
k-mcgrady
This is nothing to do with Bitcoin. You basically won the lottery. Some people
mined or bought Bitcoin, it got a lot of media hype so the price sky rocketed,
and then your coins were worth a lot of money. If I bought 200 BTC now and
waited a few years I doubt I'd have the same experience. I'm happy for you
that you got to use that to help you start a business but it was a lottery
win.

~~~
pmorici
"If I bought 200 BTC now and waited a few years I doubt I'd have the same
experience."

Why? This is like the 5th or 6th boom bust cycle in Bitcoin and each boom has
been bigger than the last. even the current long price decline is not
unprecedented.

~~~
cmdkeen
This is like the 100th boom busy cycle in the stock market and each boom has
been bigger than the last. Why not invest in equities?

Because past performance is not an indication of future performance, and
because you don't know when the cycles are going to fall. Unless you're
willing to lock up that capital whilst waiting for the uptick you're taking a
huge risk.

------
gulpahum
The reason could be that Russia started banning bitcoin websites.
[https://www.cryptocoinsnews.com/russia-blocked-several-
bitco...](https://www.cryptocoinsnews.com/russia-blocked-several-bitcoin-
sites-preperation-russian-bitcoin-ban/)

------
reddytowns
I wonder if this is due to the Bitstamp fiasco.

Because of what ultimately happened to mtgox, when the bitstamp exchange came
back online again, a lot of people probably wanted out as quickly as possible,
fearing it to be insolvent.

Since keeping bitcoins oneself is too technical, the easiest path to cut ties
with bitstamp would be just to sell, and probably many of them did.

------
jhildings
Low was 152 at Bitstamp, quite a dump
[https://bitcoinwisdom.com/markets/bitstamp/btcusd](https://bitcoinwisdom.com/markets/bitstamp/btcusd)

------
CyberDildonics
It seems that most people still don't fully grasp why bitcoin is valuable or
for that matter why fiat or gold are valuable. The best explanation I've seen
is actually the series of slide the Winklvoss twins put together (when they
were taking a break from creeping everyone out).

[https://winklevosscapital.com/value-investors-congress-
prese...](https://winklevosscapital.com/value-investors-congress-
presentation/)

~~~
chuckkir
I was hopeful, but it doesn't explain why gold has value. It just starts with
the assumption that it does. I'm afraid that sooner or later folks will
realize it's just a shiny metal with little intrinsic value, much more
abundant than many elements.

~~~
CyberDildonics
It absolutely explains that bitcoin, gold, and fiat all have value because
they are strong in various properties of money. Gold is scarce, durable,
fungible, portable etc. all to a certain degree. Not much money is history has
had 'intrinsic value' so their intrinsic value becomes the properties of ideal
money that they posses.

If water was scarce, it would probably make good money. But water is both
abundant and not atomic so it can be created.

------
lordnacho
From what I can tell, it looks a lot like the oil price collapse. Not that
it's directly connected, because BTC holdings are still very low and not
really part of any serious investor's portfolio.

But it looks like a lot of people have invested in extraction capacity, and
they need to sell to remove their BTC risk. They're buying the mining
equipment in dollars after all. And they know that faster and faster chips
will come on the market.

On the other side of the equation, demand doesn't seem to have increased quite
as much as expected. You still have to go out of your way to find something
that you can buy with BTC. Heck, I have a few BTC and I've never used them for
anything, and never come across a vendor of something I wanted who wanted BTC
for the item. In fact, there are only three categories of people I've met who
were interested: nerds, people who wanted drugs, and people who wanted to
launder money.

~~~
pjc50
Izabella Kaminska of the Financial Times has been following this:
[http://ftalphaville.ft.com/2015/01/09/2084052/bitcoins-
upcom...](http://ftalphaville.ft.com/2015/01/09/2084052/bitcoins-upcoming-
capital-crisis/)

------
coding4all
It's amazing how so many people are concerned about the dollar price of
Bitcoin. If you believe in Bitcoin, you want Bitcoin and not dollars.

~~~
sqrt17
Not trying to be cynical about this, but: You want nice things, not bitcoins
and not dollars.

Currently, more market actors accept dollars (or Euros, or JPY, or UKP) than
bitcoin, hence you're closer to the things you desire if you have dollar
liquidity than if you have bitcoin liquidity.

Investments, on the other hand, should be neither in dollars nor in bitcoins,
because dollars have inflation and bitcoin is too volatile.

~~~
jasonisalive
If you truly believe in Bitcoin, you believe that a) there is a good chance
that in the future USD, JPY, EU, UKP et al. will be worthless relics,
ornaments in a history museum that schoolchildren laugh and joke about and b)
that the world would be a massively, massively better place if a) were to
eventuate.

Your job is to buy as much Bitcoin as you can as cheaply as possible, cross
your fingers and try and do whatever you can to make a) happen, while spending
at little of your BTC as possible. You hope to profit immensely but you are
also excited for how the world as a whole will profit.

If a) doesn't happen, then you basically have to go back to the drawing board
for imagining a way for society to progress and you to make some money.

~~~
avasdvasdv
> If you truly believe in Bitcoin, you believe that a) there is a good chance
> that in the future USD, JPY, EU, UKP et al. will be worthless relics

"believe"? You sound like a cult member. There is 0% chance that the world
currencies will disappear anytime soon. If it did, bitcoins would be worth
nothing anyways.

> will be worthless relics, ornaments in a history museum that schoolchildren
> laugh and joke

I think you are describing bitcoins...

The pathetic desperation of bitcoin fanatics like you is laughable. It's like
listening to a retarded islamist.

------
stretchwithme
Are oil and bitcoin becoming less valuable? Or is the value of the measuring
stick, the dollar, changing?

If you measured how tall your kid is every day and he's 5'1" one day and 4'8"
the next and 6'1" the day after that, there just might be a measurement
problem.

For whatever reason, the end of quantitative easing or whatever, the dollar is
getting stronger.

~~~
adventured
The dollar began running right around July 1st (the effect of the Fed shutting
down QE):

[http://finviz.com/futures_charts.ashx?t=DX](http://finviz.com/futures_charts.ashx?t=DX)

Oil began falling at the same time:

[http://finviz.com/futures_charts.ashx?t=CL](http://finviz.com/futures_charts.ashx?t=CL)

And bitcoin also began the current downturn about the same time. I'd be very
reluctant to link the dollar's increase with any of the decrease in bitcoin,
even though it's an interesting discussion point, with some money potentially
flowing out of bitcoin and into dollars (since it's gaining value, and likely
to gain more if the Fed proceeds to raise interest rates this year).

That said, gold on the other hand has not taken a beating since July 1st
despite the dollar's significant move:

[http://finviz.com/futures_charts.ashx?t=GC](http://finviz.com/futures_charts.ashx?t=GC)

------
yAnonymous
If people actually started using it as a currency instead of only using it to
trade for other currencies, it would be more stable.

~~~
Meekro
They do: [http://blog.bitpay.com/2013/12/11/bitpay-
exceeds-100-000-000...](http://blog.bitpay.com/2013/12/11/bitpay-
exceeds-100-000-000-in-bitcoin-transactions-processed.html)

------
logic_geek
People might want to ask the question why the Bitcoin price goes down so much.
One reason might be that keeping up network security is too expensive with
Bitcoin (proof of work) and the miners have to sell their bitcoins to cover
their electricity costs. Now if there is not enough demand for bitcoins then
the price declines since miners continuously have to sell to cover costs. This
also has been laid out here
[https://www.youtube.com/watch?v=_-TLA3j-ic4](https://www.youtube.com/watch?v=_-TLA3j-ic4)
As the guy in the video points out there is not only one way realize
blockchain technology and proof of work surely is not the least expensive.
Proof of stake systems mitigate the "high cost for network security problem".
I suspect that one or more proof of stake systems will be part of the next
round of innovation (and the next bubble) based on blockchain technology.

~~~
jerrycabbage
POW's waste has always disturbed me. If BTC was inherited as the global store
of value it would just help destroy with planet with the emissions required
for security.

------
simias
So I can't find anything in the comments: what's the cause for this sudden
crash?

~~~
mikeyouse
I think the most likely scenario is the Butterfly Labs theory;

[http://www.reddit.com/r/Bitcoin/comments/2sdwf8/butterfly_la...](http://www.reddit.com/r/Bitcoin/comments/2sdwf8/butterfly_labs_is_the_culprit/)

Basically, BFL pre-sold a ton of miners to people, never actually sent them,
mined a ton of bitcoin 'testing' them and were then sued when they refused
refunds. The FTC got involved and told them to send customers their money so
at some point, BFL has to liquidate a large number of coins to meet those
obligations.

People have tracked large portions of the sell pressure to known BFL wallets
and the rest of the downward pressure is probably just follow-on selling
continuing the yearly trend.

------
jasonisalive
If you truly believe in Bitcoin, this is just one more insignificant blip on a
path, driven by inexorable network effects, that leads to Bitcoin becoming the
sole world currency and savings commodity, leaving the fiat currency milieu of
2014 in the dustbin of monetary evolution. A chance to buy at a relative
discount and nothing more.

~~~
rasz_pl
are you talking about Beanie Babies?

~~~
jasonisalive
No, I'm talking about something which has the potential to be _the_ world
currency.

~~~
tedunangst
dogecoin?

------
bbunix
Could be something as simple as a russian margin call... commodities in
general are having a rough time.

------
rajat2109
Bitcoin is the currency of future. It looks promising but to change people's
mindset and to get accepted widely, it will take some more time. We just need
to be patient and believe in this future currency.

------
xkarga00
Oil price has also fallen over 80% during 2014 but I guess it's more fun to
talk about a "crashed" technology in here.

~~~
pg314
The oil price fell closer to 50% than 80% in 2014: WTI went from $110 to $53.

------
pearjuice
Which will most likely immediately follow people buying at low and preparing
to pump again.

------
derefr
Huh. Does this have anything to do with the 1.25-hour mining gap that occurred
on Monday?

~~~
atian
No. It's all speculation.

~~~
hueving
The majority of bitcoin transactions are speculation. If you ever purchased or
sold bitcoin because you expected a price appreciation/depreciation, you were
speculating.

There was a very small percentage of the market using it to buy online goods
that wasn't speculating, but it's small representation is the reason the price
is so unstable.

------
rurban
Great, time to buy!

------
llSourcell
its not about bitcoin, its about the blockchain.

------
ygmelnikova
Went to purchase $100 worth of Bitcoin back in the day at $0.03 ea. CC didn't
go through. Thought I would try again the next morning with a different card.
After sleeping on it, decided it was probably a waste of $100.

I'm even less inclined to spend $100 now.

~~~
Transisto
Cool story bro,

------
marincounty
1\. Thought it was a scam. 2\. looked into it and realized I was wrong. 3\.
Looked into building a mining rig. 4\. Worrried about ROI, after energy and
hardware. 5\. Seems like everyone was mining. 6\. Knew I competed with
entities with deep pockets. 7\. T.V. news started to treat bitcoins like gold
quotes. 8\. Started seeing bitcoins accepted here. 9\. Wish I didn't
procrastinate years ago. 10\. Glad I didn't invest in bitcoins. 11\. I wish it
well though. Anything is better that credit card transactions--with their
fees. It is still a great idea, and I hope this is just a market fluctuation!

~~~
marincounty
Read past the first sentence? Or, was the problem TLDR? "One of the days
Alice, POW. Straight to Control-Delete!" I was praising the blessed Bitcoins?

------
moe
Cue the standard HN bitcoin thread with everyone explaining why it is dead,
why it could never work and why everyone involved with it is a scam or stupid
anyway...

------
sagivo
bitcoin is dead. long live the bitcoin!

------
jordsmi
Time to get more cheap coins

------
jbverschoor
bitcoin, just like oil have dropped because energy will be cheap / nearly free
soon.

~~~
johndevor
Explain?

------
gchokov
Meh.

------
gii
If you see the trend, it is definitely sinking...

