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i.e. If someone has 100 BTC on Stamp and 100 BTC on Bitfinex, and a pile of USD on both,
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Don't know about you, but I'd feel pretty uneasy leaving that kind of money on an exchange. And I would've said that *before* Gox imploded.
Something happen?
The 30k coins were sent to 1 winner. So now everybody totally completely fucking panics.
I see that as quite positive. Now if the USMS auctions off the rest of the gov's BTC holdings, there's a confirmed pool of willing bidders who were left empty-handed by this first auction. Any subsequent auction's bidding is therefore likely to be even more aggressive relative to prevailing market-price at the time.
This drop will create the new floor on high volume. One buyer is very bullish. It means the sale price was likely higher than most anticipated.
And a LOT of interested parties with no bitcoins.
Bingo!
In other words, you're saying that people attach a speculative premium to bitcoin. I disagree--there has always been a speculative discount relative to its utility. This discount reflects the non-zero probability that bitcoin may fail.
True believers in the future success of bitcoin as global currency should be buying and holding even if the price rose to five figures. That they are not means that any such true believers have run out of money so they can't influence the price any more.
A rational true believer should understand that any project has a non-zero probability to fail. Also, no one wants to live in underground sewage while holding five figures of bitcoin @ five figures USD each.
The analysis is the same as it's always been:
http://www.honestnode.com/bitcoin-fair-value-a-first-assessment/tldr:
http://techcrunch.com/2014/10/06/what-is-happening-to-bitcoin-right-now/Note the quote. Exactly what i was thinking. It makes the most sense of all theories i've heard yet it's the hardest to believe for most here for some reason.
"Seems pretty clear to me. An early adopter decided $300 is their breaking point. They want to cash out their $9m before they miss their chance. They’re not experienced with handling this amount of money because they’ve never been rich before; they just got lucky. They don’t have the connections to sell off-market so they decided to sell the way they know and the way that’s guaranteed to work: a Bitstamp sell order below market. They could maybe get more money with a more sophisticated trading strategy but who cares? They’ll take their $9m and retire on a beach somewhere for the rest of their lives.
That’s what I’d do if I had 30,000 BTC right now and I bet you would too."
The guy was looking at the price going down every hour and basically panic sold. Below 300 was just too much for him. He was losing 10.000's per day.
He moved the coins to Stamp, right away did a 5k dump to secure a good amount of money (his aim was a million) and when he saw there were buyers he put the rest up at 300.
Perfectly reasonable explanation.
He wasn't the bearwhale. He also isn't buying back. Just a guy who wanted out. Yes, that happens.
Didn't he first put the wall up at $280, take it down for an hour or two, then put it back at $320? And it was getting nibbled at $320 too. Then it disappeared and came back at $300, where it was obviously got eaten until gone. I really don't understand why he moved it from $320 to $300 given that it was getting action at $320...*iff* he was (even poorly) rationally trying to price-maximize.
Obviously tossing up a single 30k wall doesn't make too much sense for someone who's primary objective was rationally selling that stash. But I can maybe buy the theory of an irrational/undisciplined/freaked-out holder *except* for the move from $320 to $300, since there was indeed stable action at $320.
The only fully rational motivation I can see is if he was trying to achieve a low but stable price for a period of hours during which to secure an OTC deal in the other direction. He tried $280, but it was unstably crashing the price, so he tried $320. He got good interest there with a stable price, so he decided to see if he could do better and keep things stable at $300. Price pegged right up against the wall without crashing, so he stuck with it, and priced a bigger buy deal on OTC based on a stable price of $300. ...
Who knows... Not all players are rational, so it could be anything. Whatever; even the big trades are insignificant noise in the long run.
Didn't he first put the wall up at $280, take it down for an hour or two, then put it back at $320? And it was getting nibbled at $320 too. Then it disappeared and came back at $300, where it was obviously got eaten until gone. I really don't understand why he moved it from $320 to $300 given that it was getting action at $320...*iff* he was (even poorly) rationally trying to price-maximize.
Obviously tossing up a single 30k wall doesn't make too much sense for someone who's primary objective was rationally selling that stash. But I can maybe buy the theory of an irrational/undisciplined/freaked-out holder *except* for the move from $320 to $300, since there was indeed stable action at $320.
The only fully rational motivation I can see is if he was trying to achieve a low but stable price for a period of hours during which to secure an OTC deal in the other direction. He tried $280, but it was unstably crashing the price, so he tried $320. He got good interest there with a stable price, so he decided to see if he could do better and keep things stable at $300. Price pegged right up against the wall without crashing, so he stuck with it, and priced a bigger buy deal on OTC based on a stable price of $300. ...
Who knows... Not all players are rational, so it could be anything. Whatever; even the big trades are insignificant noise in the long run.
What about this: he was afraid that the price would just keep falling if he waited too long, and decided he had to sell in a few hours at most. He asked 280, saw that there was enough demand, tried at 320, saw that it was going to take a long while, so moved to 300, and it worked well enough for his purposes.
He didn't have it at $320 for very long, IIRC (less than an hour?), and it was getting action the whole time. The action during the first hour at $300 seemed similar; it took a few hours to really get going. Though maybe my memory is off; I was doing other stuff while glancing at the book/wall periodically.
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By the way, tell us again how in your view Warren Buffett is stupid and ill-informed.
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I'm a big Warren Buffet fan (at least as far as his evolved value-investing approach goes). I've read his annual reports, several bios, watched many of his interviews, etc.
In my "normal" investing (ie, outside the BTC world), I tend to do mostly value investing, except where I have specific domain expertise that I feel gives me an edge.
Like Bitcoin for example. It has been unfortunate that Warren has chosen to comment in a domain in which he has no expertise, being famously and self-admittedly tech-inept, yet he has done so nonetheless, obviously. And, quite frankly, from the tech-illiterate perspective, Bitcoin can be difficult to understand.
Furthermore, Bitcoin is a play on growth, not on unlocking existing value, and is therefore antithetical to Buffet's core investing competencies even without the tech-literacy requirement. So no surprise that he doesn't see it, and hard to give any weight to his opinion in this area, brilliant though he is.
Civil engineer: Hey, Boss. Traffic on the bridge is increasing by 50% per month. Shouldn't we widen it?
Bureaucrat: Ha! That bridge has excess capacity. If traffic gets too high, we'll just increase the tolls. Most of those schmucks don't really need to go anywhere anyway.
Civil engineer: Do we know that for sure? What if there is an evacuation or something?
Bureaucrat: That bridge was intentionally designed with low capacity to prevent invasions! Widening it would be a dangerous departure from historic bridge operations.
Civil Engineer: Aren't bridges supposed to be used to facilitate travel?
Bureaucrat: Yes, but only the right sort of travel. That's for me to decide! If traffic gets too heavy, and tolls get too expensive, the people can use buses. Too many single passenger cars anyway.
Civil engineer: Do you own a bus company?
Bureaucrat: Purely coincidental! I'm just guarding against bridgebuilder centralization.
Civil engineer: I see. No conflict of interest there. What's the name of your company anyway, Busstream?
Bureaucrat: BridgestreamTM, Smartass.
had to come back just to lol
Me too. Great post.
Now let's widen this damn bridge and/or fire the bureaucrat.