
BTC correction happening? - sinak
http://www.bitcoin.clarkmoody.com/
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wmf
Just normal 25% intraday volatility; nothing to see here.

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ljd
Coinbase is down. It probably isn't helping the situation.

Wow, as I'm typing this now the market is massively recovering. I just saw it
go from 600 to 700 in probably 30 seconds. There are a lot of people doing
algo trading with bitcoin.

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this_user
The only surprising thing is how much faster BTC goes through different market
phases than other financial instruments. A blow-off, reversal and sell-off
like this would take at least days in equities or commodities while this
merely took hours. It also appears as if the frequency and amplitude of BTC
tops is increasing. This trend actually makes BTC less and less useful as a
currency to do business in since you have to hedge your exposure by the hour.

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SwellJoe
It's still such a small market. A single whale can cause a price to fall or
rise...a group of whales could "crash" the damned thing for a time. It's also
a nerd market. There is algorithmic trading happening at a level that only can
happen with firms that have access to the direct feed on the exchanges...BTC
allows everyone with enough knowledge to do high frequency trading.

But, every day the size of fluctuations that are possible will become smaller.
More people holding BTC, more people buying and selling BTC, leads to less
ability of a few buyers or sellers to cause a major change.

Someone in another recent BTC thread joked (in a "ha ha, only serious" kind of
way) that the current speculative nature of the market might get enough people
buying into BTC as a lottery ticket kind of purchase to cause the tipping
point for it being a viable currency to happen without anyone noticing. If 20
million people in the US held Bitcoins...that's a big market for vendors to
want to tap into. It's worth a little risk to get those buyers, as well.

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betterunix
"Someone in another recent BTC thread joked (in a "ha ha, only serious" kind
of way) that the current speculative nature of the market might get enough
people buying into BTC as a lottery ticket kind of purchase to cause the
tipping point for it being a viable currency to happen without anyone
noticing"

How is that? It sounds like you will have lots of people with Bitcoin
holdings. I do not see a currency, because I do not see where anyone is using
Bitcoin as a medium of exchange.

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SwellJoe
"It sounds like you will have lots of people with Bitcoin holdings."

Which is all it takes to have lots of people who want to buy things with
Bitcoins. Since there's almost zero barrier to doing so, once you have enough
vendors accepting Bitcoin, there's little reason _not_ to buy things with
Bitcoin.

What I'm getting at is: The influx of millions of new Bitcoin holders will
lead to an influx of new vendors accepting Bitcoin. Sure, people are still
clinging to bitcoins like gold...wanting to hoard it rather than use it. But,
that desire will fade when the market settles down and becomes more
predictable.

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betterunix
You are hand-waving away this step:

"...once you have enough vendors accepting Bitcoin..."

There is also some irony in this statement:

"people are still clinging to bitcoins like gold"

 _Lots of people have gold_ but you would be hard-pressed to find any shop
that accepts payments in gold.

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SwellJoe
I'm not really intending to hand-wave it away. I just assumed it would come to
pass, based on past evidence (there's more vendors every day, with the pace
accelerating). I may be making an incorrect assumption. There are, in fact, a
_lot_ of assumptions being made by those who are bullish on Bitcoin, and some
or all of them may be wrong. In some cases, if the assumptions are wrong, it
will mean the end of Bitcoin. In others, if the assumptions are wrong, it'll
just mean Bitcoin is more limited as a currency than we might like.

But, it can't be anything other than a hypothesis until it is tested; neither
you, or I, can know how this is gonna play out. Bitcoin isn't quite like
anything else that has existed before, including gold or other currencies, so
we're all guessing. I've laid out what I think will happen, and a bit about
why I think it will happen.

One last point: Gold, precisely unlike Bitcoin, is not easily or cheaply
transferable over the Internet. That's a big distinction and, I think, enough
to make it clear we're dealing with a different thing entirely. I left it
unstated before as I kinda felt it would be obvious to HN readers. But, any
time anyone compares Bitcoin to gold or another traditional currency or store
of value in a _general_ way (without being specific about how Bitcoin seems to
be behaving like that other subject in one way or another), I question the
validity of the analogy straight away. I genuinely believe Bitcoin is
something new, and new human behaviors will develop around it.

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nyarlathotep
I think we have to wait a little longer to make that call. The "correction"
seems to be correcting itself now:)

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andy_ppp
Completely - this is a very new commodity market upon which lots of people are
speculating. I intend to speculate on it and so do (are) many people in the
tech and now wider communities.

Worth remembering that at least bitcoin is backed by some value of work, what
is USD backed by again? Debt :-D

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betterunix
1\. Bitcoin is not backed by anything. The work that goes into creating
Bitcoin via the mining process has no bearing whatsoever on the value or
utility of Bitcoin.

2\. USD is backed by the law -- laws concerning debts, laws concerning taxes,
laws concerning torts, etc. The law is what makes USD useful, which is why USD
has value.

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gustoffen
You are wrong about point number 1. The purpose of mining is to process and
secure bitcoin transactions. The work that goes into mining is what provides
the utility of bitcoin. The 25 btc mining reward is just an incentive.

~~~
betterunix
The problem with your theory is that it permits anyone to start their own
Bitcoin fork and magically people will use it.

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seansoutpost
Yes, it is correcting back to what it was...this morning.

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immad
Its pretty volatile today. Probably not that interesting for HN to see new
posts on it.

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andy_ppp
Yeah, but it went up to $900.

There are a lot of people trying to buy bit coin right now; it's a commodity
and people are speculating on it. There is more demand than supply right now
IMO.

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qwertzlcoatl
Can somebody with some knowledge about the chinese bank and regulatory system
tell me if Bitcoin presents an attractive opportunity for chinese people to
buy foreign currency like the Euro and Dollar easily?

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crystaln
Yes. If you have a large amount of Chinese Yuan (CNY), it's very difficult to
legally convert that to foreign currency or purchase substantial foreign
assets. Foreign exchange is strictly regulated.

Until the Chinese government clamps down on BTC China, as I expect they will,
bitcoins offer an excellent, possibly even legal, method for Chinese to take
their money out of China. It's so useful in fact, that Chinese are willing to
pay a 30%+ premium for bitcoin on the Chinese exchange.

Note that this same problem also stands in the way of those who might
arbitrage the difference in the exchange prices.

(I've lived and transacted in China)

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_delirium
Most of these purchasers are not really a net demand for Bitcoin, though, are
they? I see them as mostly using Bitcoin as a short-term intermediary to gain
USD or EUR while bypassing exchange controls. So they'll account for, say,
1,000 BTC bought, and 1,000 BTC sold.

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crystaln
Many of them may not have USD bank accounts overseas, or wish to have the
funds associated with their name.

I suspect a large amount of the funds are ill-gotten gains from rampant
corruption by government officials and cronies.

Also, many will probably decide to hold on to at least some bitcoin even if
they do have means to convert to foreign currency. Since there is a massive
amount of money trying to get out of China - hundreds of billions - it's
certainly possible there is significant net demand. If each purchaser keeps
20% of their assets in bitcoin, and $10M is fleeing each day, that's $2M in
net demand - enough to influence price significantly at current volumes.

The differential between the Chinese exchange and US exchange may partially be
explained by Chinese purchasing in China - raising the price - then selling
overseas.

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PhasmaFelis
There seems to be some mistake. I clicked on a news headline, but I got a
incomprehensible stream of digits and a graph with no horizontal scale.

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codemonkeymike
If I had a Bitcoin for every prediction that Bitcoins were going to have a
correction, I would have more Bitcoins then what exists.

