xulescu
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May 03, 2014, 01:58:46 PM

But without fresh fiat, no matter how low we go, we will revisit that low eventually.

This is not true. It is not strictly true that you need new money to revisit ATHs. If nobody sells, the price goes up forever. The trick is how to convince everybody that nobody else will panic. This is exactly what the West CBs attempt now.

This is a ludicrous myth. Almost 4000 coins are being mined daily. They will be sold. Also merchants accepting payments though bitpay and coinbase - those coins will be sold.

There will be inflation for years to come.

Not every is going to hold so you can become a millionaire with 1 coin.

I believe you are naive in your dismissal. Most if not all fresh mined coins are bought over the counter through long-term contracts. Merchants don't depress the market because hodlers are not suddenly buying all they can buy with Bitcoin. The YEN is inflating fast too, but it's not going down relative to the USD. The higher BTC goes the fewer BTC the hodlers need to sell. And so on. Actually, why would any hodler sell now unless he was squeezed somewhere else?

Markets have two regimes, depending on whether the majority is investors or speculators. In a 100% speculator market where a few large players collude, the price can move up while the cartel is unloading or otherwise ("manipulation"). The cartel can offer a global implicit put ("bailout"). A bubble only breaks when the common knowledge that the price goes up forever starts to falter. When enough players doubt, the market reverses suddenly into the same behaviour, but down.

The point is that, again, if nobody sells then the price goes up forever. It is not even necessary that nobody sells. The unstable equilibrium between the attractors requires that volume goes down as 1/x if you have a fixed amount of cash in the system. Exchange fees simply move the equilibrium to a narrower function, like 1/x^2.

You sound like an excellent player of the game, but you do not, or pretend not to understand how to play the players. In a speculator market like BTC, alts, stocks and everything now, stocks in the 20's, there is no fair value. There is no correct price. It is all a coordination game. I seriously doubt you actually ignore that the other players are strategic too. There are times when that assumption works, but that is not the case now.

I believe you know exactly what I'm talking about and that you're talking your books with no pretense for objectivity (which was established to be the correct behaviour earlier).