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CNBC now has a Bitcoin ticker (cnbc.com)
149 points by cuttooth on April 12, 2013 | hide | past | favorite | 61 comments

Hahaha. I love the idea of Wall Street jocks vs. Internet Nerds in FOREX.

I can just imagine some lower Manhattan hedge fund guy shorting Bitcoins just because he's got 100k in fun money.

>I love the idea of Wall Street jocks vs. Internet Nerds in FOREX.

Wall Street has had its own nerd contingent for a long time:


Especially these days, a Manhattan hedge fund guy is more likely to be a Quant than a Jock.

You're probably more likely to find jocks in the mega-banks, particularly in the flow trading and sales departments.

Edit: Holy shit, the exchange rate dropped to ~74 from, what, like 250 yesterday/day before?

Well, yeah ... that's one of the reasons why there's so much attention to bitcoin lately - volatility is through the roof, and a 70% drop in a day is a big deal.

What people neglect to mention is that it rose just as fast.

not quite as fast, but it's still up 300%for the year lol.

It's up a lot more than 300% for the year.

True, I was approximating from when I bought in. More like 500%, when I posted above or 700% now.

You mean that guy that bought at $12?

BitCoin is currently capitalized like a mid-sized stock. 11m * 80 = 880 million company.

Unlike Bitcoin, stock in a company has meaning beyond the stock market, such as voting rights or equity in the company. Bitcoin makes no guarantees at all -- even fiat currencies like USD carry some sort of legal meaning (e.g. that you can use the currency to pay taxes or to settle debts).

>Unlike Bitcoin, stock in a company has meaning beyond the stock market

Or at least that's what we like to think.

1 stock represents fractional ownership of the company, which owns physical assets, liabilities, accounts payable, etc. In other words, real life assets.

On the other hand BitCoin fundamentally has no tangible asset backing it. Its price is driven purely by supplly/demand, rather than any sort of book value.

I don't know enough about macro finance to discern whether this is a good/bad/neutral thing for BitCoin, but it's a worthy distinction to make in comparing stock and Btc.

I suggest anyone read "Barbarians at the Gate" about the fall of RJR Nabisco if you believe that stock ownership actually means you have an influence on the company.

It seems that the primary reason for owning stock is almost never the voting rifbts or the dividends (obvious considering there are nonvoting stocks and nondividend stocks which are still valued).

The primary reason for owning stock is voting rights only when you're talking about owning enough of the stock that your vote makes a significant difference, which in a publicly traded stock is difficult-to-impossible for a small investor, which is most investors. The primary reason for owning stock is absolutely voting rights during hostile takeover where the acquiring company buys enough of the stock to vote out the current management in favor of management that will approve the merger.

On the other hand, dividends are actually quite often the primary reason for owning stocks, just not typically the stocks we talk about a lot here. Stocks in large, well established companies are often pretty stable, growing only with the market at large, to the point that the dividend can certainly be the bulk of the payout for owning the stock.

I'd say in a stable market the real value of bitcoins would be the value of goods exchanged for bitcoins in a given time divided by the velocity of money. But since the market is expanding, it makes sense for investors to be forward-thinking, so the value depends on your projection of the growth of that market.

Couldn't the real life costs of mining the coins be a base for the bitcoin value ?

Putting cost into something doesn't generate value. I have an acre of land. If I hired a team of workers to repeatedly dig a hole in my land and then refill it with the dirt they dug up, my land wouldn't become worth a million dollars just because I expended a million dollars of labor doing something pointless. Likewise, bitcoins don't have value just because you expend valuable computing and energy resources mining them.

> Couldn't the real life costs of mining the coins be a base for the bitcoin value ?

Not really. You can't recover the costs by "melting down" bitcoins, so it doesn't provide a support for the value of bitcoins the way that the use-value of gold might provide a support for the value of gold currency.

Clearly, if the cost to mine coins is less than the market value plus the expected transaction fees that can be earned by mining (mining is also transaction verification), there is no economic incentive to mine, but that doesn't operate as a price floor so much as a limit on the viability of the system.

If I spend $500 in energy to cook mac and cheese, is that mac and cheese worth $500?

More precisely: Does the cost of making something have anything to do with the price it is sold at?

"Anything"? Yes. People aren't going to make new things at cost X with the goal of selling them at cost Y. If they did, the price would fall further, faster. Therefore, there's some relationship.

That said, it's by no means a floor, particularly on goods that stick around a while, since the things already in existence can more than meet the demand, which can drive the price arbitrarily low.

It's more like the value determines the mining cost. The coins are created at a fixed rate, and the difficulty of creating them adjusts to the total computation being spent on the task.

As the value of the created coins go up, miners can afford to spend more on the effort in an attempt to capture a bigger share.

The stock market is a place the stock is traded.

A bitcoin exchange is a place where the bitcoin is traded.

Obviously this is neither the only actual, nor potential use of bitcoin.

voting rights? most stock holders don't get any in case you did not notice.

[citation needed]

It is my understanding that common stock typically does have voting rights.

You can vote, but you can't change anything. If voting could actually change anything, they'd make it illegal.

Mid-sized company usually has real assets and financials that can be used to evaluate its fundamental value. BitCoin valuation now is nothing more than shared dream, having no fundamentals whatsoever behind it.

I understand your point, but as a currency, it does have fundamentals. The price of a currency is determined by supply and demand. The supply side of bitcoin is fairly well understood and aside form the periodic adjustments, its pretty easy to forecast. The demand side is far murkier and, like a currency, based on several uses. You have store of value, which may explain part of the recent spike due to failing currencies in Europe. Transactional uses, which have also been increasing as more retailers have begun accepting bitcoin. Unit of account, which is, due to a lack of stability right now, the worst use of bitcoin.

So, if you view bitcoins as a stock, you are right, the fundamentals aren't there, but its not a stock. As a currency, the fundamentals are there, but until you can quant the demand for alternatives to gov based currencies and the transacitonal demand, it will be tough assigning a "correct" price for bitcoins and thus the market will be volatile.

Currency and company's shares are two very different things. Currency is meant to be a shared dream, since it is no more than means of exchange and means of bringing values of many things to one common measure. However, when you start treating currency as investment, the picture becomes much more complicated. Especially with bitcoin, because the value right now has long detached from any supply or demand considerations and is driven by pure speculation. As such, it is heaven for speculators, but entirely unsuitable for use as a means of exchange, since it is unpredictable and impossible to use in business which values predictability. Let's say you want to build a business that accepts bitcoins. Unless your whole supply chain is also paid in bitcoins, how can you price your products if one day bitcoin costs 45 USD, next day it's 250 USD and next day it's 80 USD? How can you predict your profits, give forecasts to investors, make long-term plans, basing your business on such huge volatility?

Of course, there are ways to deal with it, and there are even ways to profit from it. But for average users of currency - used as currency, not as means of gambling - bitcoin right now is absolutely wrong. I would go even further and say any business that accepts it and doesn't do it for the tax/law enforcement evasion reasons is doing it for PR reasons only.

>>>> As a currency, the fundamentals are there

I don't understand what you mean by this. Currency as such needs no fundamentals as long as there are people willing to accept it. But currency as money is different from currency treated as an investment commodity. Confusing the two is a dangerous mistake IMO. And I see no fundamental reasons driving recent rally in bitcoins - could you name one? Please don't talk about weakening USD - if that would be the reason we'd see rallies in all traditional physical commodities used as hedge against fiat currency - such as noble metals, and we'd see other commodities raise at least in similar manner, and we'd see it in relation to other currencies too. While modest raise in bitcoin could be explained by weakening dollar, it's no way even near what we see here. So any other ideas?

I think our posts are talking past eachother as I did note the weakening currency in Cyprus and the increased acceptance of bitcoins for exchange in my response. Both of which will drive up demand for bitcoins and thus legitimately move the price, due to supply being fairly constant and predictable.

When I say "fundamentals" I am using the financial form of the word, as in the method of valuation that contrasts to "technical" analysis by trying to examine what actually comprises the price of something rather than just looking for patterns in how it behaves. A good discussion of the "fundamentals" of a normal currency can be found here (most of which don't pertain to bitcoin, but just try to think analagously): http://www.investopedia.com/articles/trading/04/031704.asp

I think you may also want to look into the "functions of money". As I was describing in my post, money doesn't serve just one purpose and while bitcoin is terrible at some of these, such as "unit of account", which all of: "predict your profits, give forecasts to investors, make long-term plans" fall under. On the other hand it actually functions fairly well as a means of exchange due to the fact that as prices fluctuate so can the value of the currency, something that physical currencies have a harder time doing. It isn't perfect and long term deals may require hedging, but as you allude to, there are ways to deal with this.

Hopefully this clarifies some of my points.

edit:some grammar

When you introduce a new commodity, like Bitcoin, there will be a speculative period like this.

Nobody knows how useful it is, how much people will like it. However, they are guessing that in the future, as more people hear about it, more people than now will use and like it.

At some point this growth curve of speculative investment will peak. The utility-for-transactions curve will "catch up with" it.

Of course, that stability will in and of itself make it more viable and hence more valuable, so it is all told quite a complex dynamic, as that affect will need to be factored in by investors ahead of time.

The fundamental value of Bitcoin comes from the network. While a single Bitcoin wallet doesn't have any individual intrinsic value the same can be said for any mid-sized company and it's assets. If you teleported a company to mars blocking it from customers and suppliers it would be equally affected. I don't agree that Bitcoin has no fundamentals behind it.

There's not really much of a difference with brogrammers.

http://bitcoin.clarkmoody.com is the best real-time bitcoin chart that I have found so far.

Sure sign of a top in Bitcoin. I remember the same thing about real estate - CNBC was doing a national tour about real estate and how there was nothing wrong. Then boom.

It's still too scary/hard to purchase BTCs (wire transfers to foreign banks, sending in a picture of your driver's license, that kind of thing). Once you can buy BTC from a reputable US site using easier payment methods, then we'll get to see an even bigger bubble.

That makes sense. I bet CNBC loves bitcoin.

Breaking News! Bitcoin loses 75% of its value! Bitcoin Rallies! Bitcoin hits all-time high! Bitcoin down on fears of IRS scrutiny.

"As we head into the noon hour, we have a panel of experts in studio to discuss what this afternoon holds for bitcoin"

That's horribly ugly, riddled with ads (some broken) and it's at least four hours out of date. It's a metaphor for ... something.

That's pretty cool. Too bad they'll probably have timeouts when they can't connect to Mt Gox like everyone else.

That's just poor software by websites that hang when polling MtGox. Much better would be asynchronously grab MtGox's quote and cache the lastest value.

Well, if that's not a clear sign that the bubble's about to burst, I don't know what is.

It will burst ... and then it will bubble again ... and burst again. But unlike stock market it will be much faster ...

There two good news for me - I was able to buy bioshock infinite and tomb raider for 20 euro both from people that bought miners 7970, and I am looking for a quad crossfire when they decide to unload the cards and cut losses.

About to? It's down over $150 in two days...

Well, these things only can be seen post factum. Right now it could go back to $300 (though I personally have hard time believing that) or to $30.

I'm only casually watching the Mt Gox ticker, but there is an awful lot of buying whenever it gets to ~$70-$75.

Yeah, but yesterday the same was true when it got to $100 or so. After a crash, there are always enough hopeful people to support a price for a little while, before it starts sliding down slowly again, until it reaches its next plateau.

I would expect this to get back down under $50 again (and I think even down to $30-$40) before it makes any kind of real recovery.

But of course, I'm guessing as much as anyone. I just wish I hadn't been busy at a trade show this week, or I would have sold when they were in the $150-$200 range.

Right now there are no trading fees on Mt.Gox until tomorrow. This probably gave (a) the guys with automated trading bots a field day to tweak their algorithms and (b) Mt.Gox a chance to take advantage of this to see if they can handle the increased load in trading.

My guess is that there's going to be a last minute scramble to buy before the trading fees get reintroduced probably pushing the price up a bit. When trading fees go in there might be slightly less liquidity, compared to yesterday and today.

Entirely speculative on my part, but plausible anyway.

Oh, I'm amazed by it. My baseless expectation is that it will certainly go under $50 and stay there for a while.

still has a lot more to go before you get to the price levels people started chanting 'bubble' at.

CNBC likes to rub it in I see

It's really easy to implement an image of a down arrow so it takes no work to look like they're 'keeping their finger on the pulse' as it were.

Yay another Bitcoin thread! If we post another dozen, it might give the illusion that this isn't a unworkable currency and the chumps will start wasting electricity!

It doesn't have a Bitcoin ticker -- it has ticker for USD<->BTC. The values of currencies on their own are purely subjective.

That's awfully pedantic. By this definition there are no tickers on CNBC at all!

> That's awfully pedantic.

Welcome to HN.

It's not pedantic. It's incorrect.

i guess it doesn't have any stock tickers then? since its IBM ticker is just the ticker for USD<->IBM

Every value is purely subjective. Welcome to the Matrix!

Bitcoin will not succeed until it's pegged to OPEC oil. https://en.wikipedia.org/wiki/Nixon_Shock

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