8 ms·

What's interesting to me is that no amount of bad news appears to affect the price of BTC. I'm not a professional or amateur trader (I've got no position on BTC

What's interesting to me is that no amount of bad news appears to affect the price of BTC. I'm not a professional or amateur trader (I've got no position on BTC at all) but the price fluctuations really seem dominated by sentiment over any sort of fundamentals.

rlayton2 9y ago
It does seem to have some effect. Bitcoin "crashed" last week quite a few pecentage points (see https://coinmarketcap.com/currencies/bitcoin/#charts https://coinmarketcap.com/currencies/bitcoin/#charts click 1M or 3M and see September 15th). Like stocks though, it is always hard to pinpoint why, because it's a market with lots of different opinions.
- samstave 9y ago
  Wouldn't sentiment based fluctuations smooth out over the maturity of the instrument. Bitcoin is an infant compared to stocks... so volatility will be 100% based on youth/ignorance/fear of what is happening with said insturment
  - qznc 9y ago
    Bitcoin price volatility is decreasing over time: https://bitvol.info/ https://bitvol.info/
- deleted 9y ago
  [deleted]
bdcravens 9y ago
It's a 24/7 market; the price responds a lot faster than other markets. So looking at day-over-day price isn't a good gauge. Additionally, by the time a story is known at large, it's usually been known for a bit among those who follow Bitcoin, so you'll see it already priced in.
- mirimir 9y ago
  Yes. I guesstimate that the China exchange and miner crackdown has been priced in for weeks, if not months.
  - rdlecler1 9y ago
    It’s only priced in if everyone knows about it. In this case most of the volume was clearly not aware.
    - mirimir 9y ago
      The evidence suggests that it was priced in. Just as the BCC/BCH business was priced in. Why do you say that it wasn't?
- JumpCrisscross 9y ago
  > It's a 24/7 market; the price responds a lot faster than other markets Weighted by volume or capital flow, most markets are 24/7.
  - nayuki 9y ago
    Could you explain what this statement means?
    - dfischer 9y ago
      How much people are trading in value at a given time period.
    - lmm 9y ago
      I think their point is that while most investors in e.g. equities (stocks) regard out-of-ours trading as "not counting" because it's a much smaller volume than in-hours trading, the amount of money that moves into or out of stocks in out-of-hours trading is still much larger than the amount that moves into or out of bitcoin (at any time). So it doesn't really make any sense to say that stocks are a 9-5 market and bitcoin is a 24/7 market.
huehehue 9y ago
Trends have been more or less identical for Bitcoin, Ethereum, and Litecoin over the past month or so. The following picture only spans a week, but it shows the exact same rise and fall in prices for all 3 -- https://i.imgur.com/GjsCMUZ.png https://i.imgur.com/GjsCMUZ.png. Trying to fit models to that picture (or the other way around) seems like trouble, but it stuck out as interesting.
- Heliosmaster 9y ago
  I think that when bitcoin takes a hit it propagates to all other cryptocurrencies, since BTCs are often seen as an archetype of all cryptomoney.
tehwebguy 9y ago
Well it crashed hard when rumors got serious, like $4k to $3300, but came back within like a week
- kobeya 9y ago
  It crashed from $5k.
  - voidz 9y ago
    So, no crash to speak of at all. Crash is when it devalues to a lot less than what we're seeing now.
    - kobeya 9y ago
      It went as low as $3.3k. That’s a bit lower than we’re at now.
  - runeks 9y ago
    $5k was the all-time high. Most assets crash from their all-time high, unless they're at an all-time high, of course.
dogruck 9y ago
The same holds true for most securities. Markets are efficient, and news is quickly priced in -- often before it's published news. How often have you read "Company XYZ beat estimates -- stock price falls?"
trhway 9y ago
>no amount of bad news appears to affect the price of BTC. This is what btc was created for, ie such government actions are fundamentally priced and architected in. At least that is what cypherpunk religion is about.
vinchuco 9y ago
> no amount of bad news appears to affect the price > price fluctuations seem dominated by sentiment Are these not two contradictory statements?
- philipov 9y ago
  Maybe the GP reads the word 'sentiment' as the root of 'sentimental' and interprets it as only referring to good sentiment, a synonym for rose-colored glasses?
thisisit 9y ago
Here's another way to look at it. If I have a stock which has bad news, I need an exchange to panic on. No exchange? Then no way to dump the stocks. So if Chinese are thinking of dumping bitcoin on account of the bad news they need liquidity to do so. Currently with all (most?) exchanges gone where do they, if they really want to, dump their bitcoins? On that note it did go from 5k to current price.
- shanusmagnus 9y ago
  This point is so chronically under-appreciated. And it doesn't even have to be "no exchange" -- it can be "high friction at the exchange" or "overwhelming tax burden to covert to fiat."
ransom1538 9y ago
I view it more like the war on drugs. Cracking down on cocaine at it's source basically just increases the value thus price. If the mining slows, it will just mean there is more money in mining.
- m777z 9y ago
  But in the long run, this won't significantly affect the supply of bitcoin because the hash difficulty will just adjust, right? That's in contrast to cocaine, where the crackdown may very well lead to long-term supply shifts, causing the price to rise. But I guess maybe if a significant amount of coins get trapped in accounts held by Chinese citizens, it would make a difference.
tboyd47 9y ago
From the article: > Chinese trading volumes now account for only around 5% – 10% of bitcoin’s or ethereum’s global trading volumes. With price there significantly lower. Price is determined by market forces, and the Chinese part of the Bitcoin market is relatively small. So it makes sense when this type of news doesn't really impact it.
Sargos 9y ago
I think it's worth remembering that Bitcoin is not a real currency or commodity yet and has little real value. The only value number we can put on it is the number that the hardcore loyalist place on it. If the only people dealing with Bitcoin are the people trying to prop up Bitcoin then it makes sense why the price isn't affected much in the long run. The loyalist have no plans to dump their Bitcoin (and realistically couldn't if they wanted to) and there are not really any normal traders in the system who would buy and sell things like this based on actual value.

rlayton2 9y ago

It does seem to have some effect. Bitcoin "crashed" last week quite a few pecentage points (see https://coinmarketcap.com/currencies/bitcoin/#charts https://coinmarketcap.com/currencies/bitcoin/#charts click 1M or 3M and see September 15th). Like stocks though, it is always hard to pinpoint why, because it's a market with lots of different opinions.

samstave 9y ago
Wouldn't sentiment based fluctuations smooth out over the maturity of the instrument. Bitcoin is an infant compared to stocks... so volatility will be 100% based on youth/ignorance/fear of what is happening with said insturment
- qznc 9y ago
  Bitcoin price volatility is decreasing over time: https://bitvol.info/ https://bitvol.info/
deleted 9y ago
[deleted]

bdcravens 9y ago

It's a 24/7 market; the price responds a lot faster than other markets. So looking at day-over-day price isn't a good gauge. Additionally, by the time a story is known at large, it's usually been known for a bit among those who follow Bitcoin, so you'll see it already priced in.

mirimir 9y ago
Yes. I guesstimate that the China exchange and miner crackdown has been priced in for weeks, if not months.
- rdlecler1 9y ago
  It’s only priced in if everyone knows about it. In this case most of the volume was clearly not aware.
  - mirimir 9y ago
    The evidence suggests that it was priced in. Just as the BCC/BCH business was priced in. Why do you say that it wasn't?
JumpCrisscross 9y ago
> It's a 24/7 market; the price responds a lot faster than other markets Weighted by volume or capital flow, most markets are 24/7.
- nayuki 9y ago
  Could you explain what this statement means?
  - dfischer 9y ago
    How much people are trading in value at a given time period.
  - lmm 9y ago
    I think their point is that while most investors in e.g. equities (stocks) regard out-of-ours trading as "not counting" because it's a much smaller volume than in-hours trading, the amount of money that moves into or out of stocks in out-of-hours trading is still much larger than the amount that moves into or out of bitcoin (at any time). So it doesn't really make any sense to say that stocks are a 9-5 market and bitcoin is a 24/7 market.

huehehue 9y ago

Trends have been more or less identical for Bitcoin, Ethereum, and Litecoin over the past month or so. The following picture only spans a week, but it shows the exact same rise and fall in prices for all 3 -- https://i.imgur.com/GjsCMUZ.png https://i.imgur.com/GjsCMUZ.png. Trying to fit models to that picture (or the other way around) seems like trouble, but it stuck out as interesting.

Heliosmaster 9y ago
I think that when bitcoin takes a hit it propagates to all other cryptocurrencies, since BTCs are often seen as an archetype of all cryptomoney.

tehwebguy 9y ago

Well it crashed hard when rumors got serious, like $4k to $3300, but came back within like a week

kobeya 9y ago
It crashed from $5k.
- voidz 9y ago
  So, no crash to speak of at all. Crash is when it devalues to a lot less than what we're seeing now.
  - kobeya 9y ago
    It went as low as $3.3k. That’s a bit lower than we’re at now.
- runeks 9y ago
  $5k was the all-time high. Most assets crash from their all-time high, unless they're at an all-time high, of course.

dogruck 9y ago

The same holds true for most securities. Markets are efficient, and news is quickly priced in -- often before it's published news. How often have you read "Company XYZ beat estimates -- stock price falls?"

trhway 9y ago

>no amount of bad news appears to affect the price of BTC. This is what btc was created for, ie such government actions are fundamentally priced and architected in. At least that is what cypherpunk religion is about.

vinchuco 9y ago

> no amount of bad news appears to affect the price > price fluctuations seem dominated by sentiment Are these not two contradictory statements?

philipov 9y ago
Maybe the GP reads the word 'sentiment' as the root of 'sentimental' and interprets it as only referring to good sentiment, a synonym for rose-colored glasses?

thisisit 9y ago

Here's another way to look at it. If I have a stock which has bad news, I need an exchange to panic on. No exchange? Then no way to dump the stocks. So if Chinese are thinking of dumping bitcoin on account of the bad news they need liquidity to do so. Currently with all (most?) exchanges gone where do they, if they really want to, dump their bitcoins? On that note it did go from 5k to current price.

shanusmagnus 9y ago
This point is so chronically under-appreciated. And it doesn't even have to be "no exchange" -- it can be "high friction at the exchange" or "overwhelming tax burden to covert to fiat."

ransom1538 9y ago

I view it more like the war on drugs. Cracking down on cocaine at it's source basically just increases the value thus price. If the mining slows, it will just mean there is more money in mining.

m777z 9y ago
But in the long run, this won't significantly affect the supply of bitcoin because the hash difficulty will just adjust, right? That's in contrast to cocaine, where the crackdown may very well lead to long-term supply shifts, causing the price to rise. But I guess maybe if a significant amount of coins get trapped in accounts held by Chinese citizens, it would make a difference.

tboyd47 9y ago

From the article: > Chinese trading volumes now account for only around 5% – 10% of bitcoin’s or ethereum’s global trading volumes. With price there significantly lower. Price is determined by market forces, and the Chinese part of the Bitcoin market is relatively small. So it makes sense when this type of news doesn't really impact it.

Sargos 9y ago

I think it's worth remembering that Bitcoin is not a real currency or commodity yet and has little real value. The only value number we can put on it is the number that the hardcore loyalist place on it. If the only people dealing with Bitcoin are the people trying to prop up Bitcoin then it makes sense why the price isn't affected much in the long run. The loyalist have no plans to dump their Bitcoin (and realistically couldn't if they wanted to) and there are not really any normal traders in the system who would buy and sell things like this based on actual value.