8 ms·

Hacker News is more interested in Bitcoin when there's a bubble forming

124 points by nvk 9y ago

5trokerac3 9y ago
Can you blame a startup oriented news aggregator for being drawn to bubbles?
Paul_S 9y ago
HN is not special. Every public exposure precedes a bubble, that's how it works, influx of new buyers raises the price.
- LyndsySimon 9y ago
  Intuitively, HN may be special. We're probably the most tech-savvy community of our size on the Internet; I would expect that HN would discuss happenings in the world of cryptocurrencies before, for instance, the NY Times. I would also expect that the demand that drives market bubbles comes from a larger, less-technical audience. Therefore, I would expect that news hitting HN would be one of the first indications that a "hype cycle" is starting, which will likely result in a price increase due to speculation by the general public.
  - mtgx 9y ago
    If NYT is the "mainstream" general media, then HN is the "mainstream" tech media. Just as some stuff reaches the NYT late, most tech stuff tends to reach HN quite late, too. A perfect example of that is the "hype" for cryptocurrencies. The hype cycle is not starting when it reaches HN, but it's close to its peak at that point. HN started being interested in Ethereum and Bitcoin again less than two months ago. That's pretty much when both of those reached their peak prices in this cycle. So when Ethereum, or Bitcoin, or some other hot cryptocurrency reaches HN in a year or two, know that then it's not the time to buy it, but to sell it (obviously if you already knew about it beforehand, which you wouldn't if you only got your crytocurrency news from HN, as mentioned above).
    - spondyl 9y ago
      Considering Floyd Mayweather just announced he's going to make a "shitload of money" thanks to an upcoming ICO in August, I think we're definitely at, or very near, peak hype for crypto.
Leader2light 9y ago
We are past bubble stage with Bitcoin IMO. It has failed to become much other than a bullshit investment vehicle. People only worried about how high it can go, instead of actually using it daily.
- just_one_time_ 9y ago
  I use it to save 20% on Amazon orders(1). I bought my coins in the $200-400 range, so am getting at 20% discount orn top of my 1,000% discount of the price of coins purchased to today's price (minus ~13% capital gains tax of course). Your opinion may be valid for you but I am literally feeding my family everyday with Bitcoin. 1. purse.io
- faceplanted 9y ago
  Seems pretty consistently used in drug trading nowadays.
  - LyndsySimon 9y ago
    Obligatory: "Dollars are still used far more often for buying drugs than Bitcoin" That said, evasion of governmental restrictions is and always has been a core use case for Bitcoin. While that's not my primary concern I don't see that as a negative.
    - 2_listerine_pls 9y ago
      Obviously meant to say mainly.
      - LyndsySimon 9y ago
        I see no evidence to support the statement "Bitcoin is mainly used in drug trading these days." I do see some mild counter-evidence. There were two very large dark-net markets that were shut down recently, and the price of Bitcoin didn't seem to respond.
wolco 9y ago
This is not true stories come out all of the time. The big news lately isn't related to price but the split.
- LyndsySimon 9y ago
  > The big news lately isn't related to price but the split. These things are not mutually exclusive. The fork will have an impact on price.
  - lloyd-christmas 9y ago
    I'd argue it's already priced in. There wasn't even a slight reaction when coinbase notified their customers that they wouldn't support the fork. I used to work as an equities trader. One of the first things they told me was "if you know something, the market already knows it".
deleted 9y ago
[deleted]
_1 9y ago
Everyone loves to watch a train-wreck.
- nannal 9y ago
  Yes, the train wreck that has been bitcoin. The $2765 train wreck. As it continues to plummet ever further upwards onlookers can only watch and exclaim.
- leemherndon 9y ago
  By what possible metric is BTC a trainwreck? This thread sounds like it's from 2012. I understood the skepticism then, but how do people still deny the utility of the blockchain?
flipp3r 9y ago
This is just when there's tech news on Bitcoin. If you want to get ready for bubbles just keep an eye on google trends "how to buy bitcoin". Worked for me, admittedly only once though.
- skgoa 9y ago
  When I overhear random people on the train, my coworkers during coffee break etc. discuss bitcoin, I know that the bubble is about to burst. This predictor has never failed.
  - nannal 9y ago
    It's an age-old tell http://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm http://archive.fortune.com/magazines/fortune/fortune_archive...
    - spondyl 9y ago
      Thanks for posting this. I think this sums things up pretty well.
  - flipp3r 9y ago
    Funny. Beside looking at Google Trends, this trigger was the same for me, The 16 year old brother of a friend of mine suddenly wanted to buy Ethereum but didn't know what it was. A month before that he wanted to get rich with binary option websites. I sold him the amount he wanted (30 eur worth at around 380USD/ETH) and then sold all of my ETH.
yohann305 9y ago
the post could have had a lot more value if it compared against other news outlets to see if HN has its own independent trends or it just plain and simple follows media trends.
rpod 9y ago
The direction of causality, if it exists at all, should probably be the other way around.
- hyperpape 9y ago
  Did you see something in the article that implied causality? You can make predictions without a direct causal link, though having one typically helps you make more robust predictions.
dperfect 9y ago
Looking at the actual charts presented in the article, I can't help but draw a very different conclusion: the spikes in Bitcoin-related HN posts do not precede BTC price increases, but instead they more or less mirror the price swings (as do most other relevant news sources). It's deceiving, especially at the scales used, because it's easy to compare the peak of a price swing with the uptick in news stories (implying some kind of predictive power) when in reality, the upticks in stories are fairly proportional to the price changes leading up to the price peaks - it's just not as noticeable due to the difference in scales. As with other markets, a trading strategy based on public news is - for any normal trader - a losing strategy. The people who are able to make gains based on news in other markets often have to pay a premium to colocate servers at or near the exchange's servers, and a trade delayed by more than a few milliseconds will have lost any potential upside in the market's reaction to the news. You can bet on the same thing happening with Bitcoin (and the decentralized nature of Bitcoin doesn't change the requirement to be located near the exchanges' servers since these trades all happen outside the blockchain - i.e., on traditional servers).
- kbody 9y ago
  Exactly, so many times I've seen BTC price reaches $X. A Github repo of the R files for a public review would be nice.
dnautics 9y ago
Would be great to see the BTC price chart in the overlay graph in logarithmic fo, it may uncover that third incident early in the chart.
- reefoctopus 9y ago
  Here's a logarithmic graph: https://bitcointalk.org/index.php?topic=831547.0;all https://bitcointalk.org/index.php?topic=831547.0;all It doesn't look like it's in bubble territory.
donquichotte 9y ago
From TFA: "You might have got the imperssion that there are a lot of Bitcoin-related posts on Hacker News lately." A typo in the first sentence means to me that quality control on form, and possibly content, was neglected when writing this post.
- jstanley 9y ago
  Fixed now, thanks.
deleted 9y ago
[deleted]
danschumann 9y ago
I read somewhere that bitcoin was deemed a pyramid scheme. Not sure about that, but doesn't it get more and more expensive to do transactions as more and more people use it? Is there a limit to unique sigs people could use?
eastern 9y ago
This 'researcher' has no control group. There's more interest in a financial asset when the price of that asset (or asset class) is increasing sharply. That's all there is to it.

124 points by nvk 9y ago

5trokerac3 9y ago

Can you blame a startup oriented news aggregator for being drawn to bubbles?

Paul_S 9y ago

HN is not special. Every public exposure precedes a bubble, that's how it works, influx of new buyers raises the price.

LyndsySimon 9y ago
Intuitively, HN may be special. We're probably the most tech-savvy community of our size on the Internet; I would expect that HN would discuss happenings in the world of cryptocurrencies before, for instance, the NY Times. I would also expect that the demand that drives market bubbles comes from a larger, less-technical audience. Therefore, I would expect that news hitting HN would be one of the first indications that a "hype cycle" is starting, which will likely result in a price increase due to speculation by the general public.
- mtgx 9y ago
  If NYT is the "mainstream" general media, then HN is the "mainstream" tech media. Just as some stuff reaches the NYT late, most tech stuff tends to reach HN quite late, too. A perfect example of that is the "hype" for cryptocurrencies. The hype cycle is not starting when it reaches HN, but it's close to its peak at that point. HN started being interested in Ethereum and Bitcoin again less than two months ago. That's pretty much when both of those reached their peak prices in this cycle. So when Ethereum, or Bitcoin, or some other hot cryptocurrency reaches HN in a year or two, know that then it's not the time to buy it, but to sell it (obviously if you already knew about it beforehand, which you wouldn't if you only got your crytocurrency news from HN, as mentioned above).
  - spondyl 9y ago
    Considering Floyd Mayweather just announced he's going to make a "shitload of money" thanks to an upcoming ICO in August, I think we're definitely at, or very near, peak hype for crypto.

Leader2light 9y ago

We are past bubble stage with Bitcoin IMO. It has failed to become much other than a bullshit investment vehicle. People only worried about how high it can go, instead of actually using it daily.

just_one_time_ 9y ago
I use it to save 20% on Amazon orders(1). I bought my coins in the $200-400 range, so am getting at 20% discount orn top of my 1,000% discount of the price of coins purchased to today's price (minus ~13% capital gains tax of course). Your opinion may be valid for you but I am literally feeding my family everyday with Bitcoin. 1. purse.io
faceplanted 9y ago
Seems pretty consistently used in drug trading nowadays.
- LyndsySimon 9y ago
  Obligatory: "Dollars are still used far more often for buying drugs than Bitcoin" That said, evasion of governmental restrictions is and always has been a core use case for Bitcoin. While that's not my primary concern I don't see that as a negative.
  - 2_listerine_pls 9y ago
    Obviously meant to say mainly.
    - LyndsySimon 9y ago
      I see no evidence to support the statement "Bitcoin is mainly used in drug trading these days." I do see some mild counter-evidence. There were two very large dark-net markets that were shut down recently, and the price of Bitcoin didn't seem to respond.

wolco 9y ago

This is not true stories come out all of the time. The big news lately isn't related to price but the split.

LyndsySimon 9y ago
> The big news lately isn't related to price but the split. These things are not mutually exclusive. The fork will have an impact on price.
- lloyd-christmas 9y ago
  I'd argue it's already priced in. There wasn't even a slight reaction when coinbase notified their customers that they wouldn't support the fork. I used to work as an equities trader. One of the first things they told me was "if you know something, the market already knows it".

deleted 9y ago

[deleted]

_1 9y ago

Everyone loves to watch a train-wreck.

nannal 9y ago
Yes, the train wreck that has been bitcoin. The $2765 train wreck. As it continues to plummet ever further upwards onlookers can only watch and exclaim.
leemherndon 9y ago
By what possible metric is BTC a trainwreck? This thread sounds like it's from 2012. I understood the skepticism then, but how do people still deny the utility of the blockchain?

flipp3r 9y ago

This is just when there's tech news on Bitcoin. If you want to get ready for bubbles just keep an eye on google trends "how to buy bitcoin". Worked for me, admittedly only once though.

skgoa 9y ago
When I overhear random people on the train, my coworkers during coffee break etc. discuss bitcoin, I know that the bubble is about to burst. This predictor has never failed.
- nannal 9y ago
  It's an age-old tell http://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm http://archive.fortune.com/magazines/fortune/fortune_archive...
  - spondyl 9y ago
    Thanks for posting this. I think this sums things up pretty well.
- flipp3r 9y ago
  Funny. Beside looking at Google Trends, this trigger was the same for me, The 16 year old brother of a friend of mine suddenly wanted to buy Ethereum but didn't know what it was. A month before that he wanted to get rich with binary option websites. I sold him the amount he wanted (30 eur worth at around 380USD/ETH) and then sold all of my ETH.

yohann305 9y ago

the post could have had a lot more value if it compared against other news outlets to see if HN has its own independent trends or it just plain and simple follows media trends.

rpod 9y ago

The direction of causality, if it exists at all, should probably be the other way around.

hyperpape 9y ago
Did you see something in the article that implied causality? You can make predictions without a direct causal link, though having one typically helps you make more robust predictions.

dperfect 9y ago

Looking at the actual charts presented in the article, I can't help but draw a very different conclusion: the spikes in Bitcoin-related HN posts do not precede BTC price increases, but instead they more or less mirror the price swings (as do most other relevant news sources). It's deceiving, especially at the scales used, because it's easy to compare the peak of a price swing with the uptick in news stories (implying some kind of predictive power) when in reality, the upticks in stories are fairly proportional to the price changes leading up to the price peaks - it's just not as noticeable due to the difference in scales. As with other markets, a trading strategy based on public news is - for any normal trader - a losing strategy. The people who are able to make gains based on news in other markets often have to pay a premium to colocate servers at or near the exchange's servers, and a trade delayed by more than a few milliseconds will have lost any potential upside in the market's reaction to the news. You can bet on the same thing happening with Bitcoin (and the decentralized nature of Bitcoin doesn't change the requirement to be located near the exchanges' servers since these trades all happen outside the blockchain - i.e., on traditional servers).

kbody 9y ago
Exactly, so many times I've seen BTC price reaches $X. A Github repo of the R files for a public review would be nice.

dnautics 9y ago

Would be great to see the BTC price chart in the overlay graph in logarithmic fo, it may uncover that third incident early in the chart.

reefoctopus 9y ago
Here's a logarithmic graph: https://bitcointalk.org/index.php?topic=831547.0;all https://bitcointalk.org/index.php?topic=831547.0;all It doesn't look like it's in bubble territory.

donquichotte 9y ago

From TFA: "You might have got the imperssion that there are a lot of Bitcoin-related posts on Hacker News lately." A typo in the first sentence means to me that quality control on form, and possibly content, was neglected when writing this post.

jstanley 9y ago
Fixed now, thanks.

deleted 9y ago

[deleted]

danschumann 9y ago

I read somewhere that bitcoin was deemed a pyramid scheme. Not sure about that, but doesn't it get more and more expensive to do transactions as more and more people use it? Is there a limit to unique sigs people could use?

eastern 9y ago

This 'researcher' has no control group. There's more interest in a financial asset when the price of that asset (or asset class) is increasing sharply. That's all there is to it.