5 ms·

Market fundamentals seem non existant here. At least a few years ago, when there were bad news the prices would reflect that. Now, it seems to go up anytime bit

by pwaai 9y ago

Market fundamentals seem non existant here. At least a few years ago, when there were bad news the prices would reflect that. Now, it seems to go up anytime bitcoin is mentioned at all, regardless whether the market understands the implications or not.

thefalcon 9y ago
Yep. In September Business Insider reported a 91% correlation between the price of Bitcoin and searches for Bitcoin on Google: http://www.businessinsider.com/bitcoin-price-correlation-google-search-2017-9/ http://www.businessinsider.com/bitcoin-price-correlation-goo...
deleted 9y ago
[deleted]
zanny 9y ago
This is why I got out of bitcoin trading. It used to correlate to the general attitude about it. Now the coins and miners are so centralized the real driving force of bitcoins price is the thousand wallets holding 95% of all BTC. Its like trying to predict market movements for a stock where 95% of the shares in a company are owned by one person. It isn't up to anyone else but that person where the price trends, because the behavior of the 5% crumbs mean nothing against the behavior of that one holder. The price will simply go up when the whales want it to, and go down when said whales want to cash out. Fees could go up or down, China could do X or Y, the Fed could regulate it or not, and the general opinions of the ecosystem don't matter whatsoever - price is fairly solely dictated by the whims of a few dozen elites nowadays.
- justzisguyuknow 9y ago
  It seems like yes the day-to-day fluctuations may be at the whim of the large wallets, but how can they actually be in control of the price over longer periods? Or if they can, then given that it's in their interest for the price to keep rising long-term, why not hold and go along for the ride?
  - RyanZAG 9y ago
    They want to slowly sell off their stock so as not to affect the price too much. If they sold nothing, they'd make no money off bitcoin and eventually when they did want to sell, the effect would be so huge as to crash the entire currency. So to maximize their return from their bitcoins, they need to constantly sell off bitcoins. Not too much to affect the price too badly, but not so little that they aren't cashing in appropriately on their investment.
    - ifdefdebug 9y ago
      Most whales don't want to sell off their stock. Simplified spoken, they want to sell one coin for 7100, then buy one coin back for 7000 and cash out those 100 bugs (or cash out 50 and reinvest the other 50). They use their huge volume to try to influence the market their way. But I guess most whales are in competition against each other, rather than cooperating. And that would be a good thing.
- nosuchthing 9y ago
  Reposting this as pertinent: In economics, the Gini coefficient is the standard measure of how inequitable a society is. This is tricky to determine for Bitcoin, as it's not quiet a "society" in the Gini sense, one person may have multiple addresses and many addresses have been used only once or a few times. (The commonly-cited figure of 0.88 is based on one small exchange in 2011.) However, a Citigroup analysis from early 2014 notes: "47 individuals hold about 30 percent, another 900 a further 20 percent, the next 10,000 about 25% and another million about 20%"; and distribution "looks much like the distribution of wealth in North Korea and makes China's and even the US' wealth distribution look like that of a workers' paradise Dorit Ron and Adi Shamir found in a 2012 study that only 22% of then-existing Bitcoins were in circulation at all, there were a total of 75 active users or businesses with any kind of volume, one (unidentified) user owned a quarter of all Bitcoins in existence, and one large owner was trying to hide their pile by moving it around in thousands of smaller transactions. (Shamir is one of the most renowned cryptographers in the world and the "S" in "RSA encryption")" [1] via https://news.ycombinator.com/user?id=davidgerard https://news.ycombinator.com/user?id=davidgerard
  - Anm 9y ago
    For context, those numbers came from 2014. http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 I can't find any more recent study specific to the Gini coefficient, however these[1] charts show an improvement over this snapshot[2] from May 2015. [1]: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... [2]: https://www.cryptocoinsnews.com/1-bitcoin-community-controls-99-bitcoin-wealth/ https://www.cryptocoinsnews.com/1-bitcoin-community-controls...
    - nosuchthing 9y ago
      The original studies suggests early mining rewards were distributed mostly to a small group of users. It also shows attempts by large stakeholders to hide their large holdings by distributing funds across several wallet accounts. If someone were to have monitored IP addresses in the swarm it may be possible to correlate attempts from single users hiding their funds across many wallets. Simply looking at the blockchain balances of single addresses will not necessarily indicate a single person controlling many addresses.
- ojr 9y ago
  where are you getting those false numbers from, this is the distribution https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... Trading on attitude is not the best trading analysis strategy, I'm glad you sold before losing more money
  - jGy7befL9drn 9y ago
    1 person =/= 1 address, and the gini coefficient is a measure of wealth distribution among people. bitinfocharts doesn't know which addresses are actually owned by a single person. an exchange, however, has the data and resources to suss it out, or at least estimate.
  - xorcist 9y ago
    Looking at that kind of statistics can be interesting as long as you understand that any individual is likely to hold their funds over a number of Bitcoin addresses. That is how wallets work. Single addresses with large holdings are mainly cold storage systems, the largest ones are identifiable as exchanges. So those are coins owned by customers.
Marazan 9y ago
Bitcoin price matches the Google trends search graph for Bitcoin.
- sillysaurus3 9y ago
  Sort of? https://imgur.com/a/SlGHw https://imgur.com/a/SlGHw Not really.
  - Marazan 9y ago
    Google trends compresses badly over longer time periods. If you look at, say, the 2010 to 2013, the first two big bubbles then you get something that looks like http://i.imgur.com/JHLmkq6.png http://i.imgur.com/JHLmkq6.png
  - Marazan 9y ago
    And then a bit later http://i43.tinypic.com/2wbrjx3.png http://i43.tinypic.com/2wbrjx3.png http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=&i=&c=0&s=&e=&Prev=&Next=&t=M&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=0&p=0& http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxU...
sillysaurus3 9y ago
At least a few years ago, when there were bad news the prices would reflect that. As someone who was there and paid close attention, this is not true. E.g. silk road's closure didn't impact BTC for more than a few days, but everyone universally would've said it'd tank BTC's price.
tveita 9y ago
> At least a few years ago, when there were bad news the prices would reflect that. Even when the news were predictable or already known! Bitcoin has never been connected to any "market fundamentals", just hundreds of day traders trying to predict each others reaction to random scraps of news as they come by.
- jpatokal 9y ago
  While I agree that most cryptocurrencies are severely disconnected from reality, is your last paragraph really any different from how the stock market works short-term?
koonsolo 9y ago
> Market fundamentals seem non existant here. I think you are looking at the wrong market fundamentals. People getting into bitcoin right now, buy because it can double their money in 6 months. They do not understand anything about Segwit2x. They see news about bitcoin, look at the price again, and say "Damn, why didn't I buy it already?", and buy. That's your market fundamental right now. That is the value of bitcoin right now: "double your money in half a year". I'm not saying bitcoin doesn't have any other value, or that it is overvalued right now.

by pwaai 9y ago

thefalcon 9y ago

Yep. In September Business Insider reported a 91% correlation between the price of Bitcoin and searches for Bitcoin on Google: http://www.businessinsider.com/bitcoin-price-correlation-google-search-2017-9/ http://www.businessinsider.com/bitcoin-price-correlation-goo...

deleted 9y ago

[deleted]

zanny 9y ago

This is why I got out of bitcoin trading. It used to correlate to the general attitude about it. Now the coins and miners are so centralized the real driving force of bitcoins price is the thousand wallets holding 95% of all BTC. Its like trying to predict market movements for a stock where 95% of the shares in a company are owned by one person. It isn't up to anyone else but that person where the price trends, because the behavior of the 5% crumbs mean nothing against the behavior of that one holder. The price will simply go up when the whales want it to, and go down when said whales want to cash out. Fees could go up or down, China could do X or Y, the Fed could regulate it or not, and the general opinions of the ecosystem don't matter whatsoever - price is fairly solely dictated by the whims of a few dozen elites nowadays.

justzisguyuknow 9y ago
It seems like yes the day-to-day fluctuations may be at the whim of the large wallets, but how can they actually be in control of the price over longer periods? Or if they can, then given that it's in their interest for the price to keep rising long-term, why not hold and go along for the ride?
- RyanZAG 9y ago
  They want to slowly sell off their stock so as not to affect the price too much. If they sold nothing, they'd make no money off bitcoin and eventually when they did want to sell, the effect would be so huge as to crash the entire currency. So to maximize their return from their bitcoins, they need to constantly sell off bitcoins. Not too much to affect the price too badly, but not so little that they aren't cashing in appropriately on their investment.
  - ifdefdebug 9y ago
    Most whales don't want to sell off their stock. Simplified spoken, they want to sell one coin for 7100, then buy one coin back for 7000 and cash out those 100 bugs (or cash out 50 and reinvest the other 50). They use their huge volume to try to influence the market their way. But I guess most whales are in competition against each other, rather than cooperating. And that would be a good thing.
nosuchthing 9y ago
Reposting this as pertinent: In economics, the Gini coefficient is the standard measure of how inequitable a society is. This is tricky to determine for Bitcoin, as it's not quiet a "society" in the Gini sense, one person may have multiple addresses and many addresses have been used only once or a few times. (The commonly-cited figure of 0.88 is based on one small exchange in 2011.) However, a Citigroup analysis from early 2014 notes: "47 individuals hold about 30 percent, another 900 a further 20 percent, the next 10,000 about 25% and another million about 20%"; and distribution "looks much like the distribution of wealth in North Korea and makes China's and even the US' wealth distribution look like that of a workers' paradise Dorit Ron and Adi Shamir found in a 2012 study that only 22% of then-existing Bitcoins were in circulation at all, there were a total of 75 active users or businesses with any kind of volume, one (unidentified) user owned a quarter of all Bitcoins in existence, and one large owner was trying to hide their pile by moving it around in thousands of smaller transactions. (Shamir is one of the most renowned cryptographers in the world and the "S" in "RSA encryption")" [1] via https://news.ycombinator.com/user?id=davidgerard https://news.ycombinator.com/user?id=davidgerard
- Anm 9y ago
  For context, those numbers came from 2014. http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 I can't find any more recent study specific to the Gini coefficient, however these[1] charts show an improvement over this snapshot[2] from May 2015. [1]: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... [2]: https://www.cryptocoinsnews.com/1-bitcoin-community-controls-99-bitcoin-wealth/ https://www.cryptocoinsnews.com/1-bitcoin-community-controls...
  - nosuchthing 9y ago
    The original studies suggests early mining rewards were distributed mostly to a small group of users. It also shows attempts by large stakeholders to hide their large holdings by distributing funds across several wallet accounts. If someone were to have monitored IP addresses in the swarm it may be possible to correlate attempts from single users hiding their funds across many wallets. Simply looking at the blockchain balances of single addresses will not necessarily indicate a single person controlling many addresses.
ojr 9y ago
where are you getting those false numbers from, this is the distribution https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... Trading on attitude is not the best trading analysis strategy, I'm glad you sold before losing more money
- jGy7befL9drn 9y ago
  1 person =/= 1 address, and the gini coefficient is a measure of wealth distribution among people. bitinfocharts doesn't know which addresses are actually owned by a single person. an exchange, however, has the data and resources to suss it out, or at least estimate.
- xorcist 9y ago
  Looking at that kind of statistics can be interesting as long as you understand that any individual is likely to hold their funds over a number of Bitcoin addresses. That is how wallets work. Single addresses with large holdings are mainly cold storage systems, the largest ones are identifiable as exchanges. So those are coins owned by customers.

Marazan 9y ago

Bitcoin price matches the Google trends search graph for Bitcoin.

sillysaurus3 9y ago
Sort of? https://imgur.com/a/SlGHw https://imgur.com/a/SlGHw Not really.
- Marazan 9y ago
  Google trends compresses badly over longer time periods. If you look at, say, the 2010 to 2013, the first two big bubbles then you get something that looks like http://i.imgur.com/JHLmkq6.png http://i.imgur.com/JHLmkq6.png
- Marazan 9y ago
  And then a bit later http://i43.tinypic.com/2wbrjx3.png http://i43.tinypic.com/2wbrjx3.png http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=&i=&c=0&s=&e=&Prev=&Next=&t=M&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=0&p=0& http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxU...

sillysaurus3 9y ago

At least a few years ago, when there were bad news the prices would reflect that. As someone who was there and paid close attention, this is not true. E.g. silk road's closure didn't impact BTC for more than a few days, but everyone universally would've said it'd tank BTC's price.

tveita 9y ago

> At least a few years ago, when there were bad news the prices would reflect that. Even when the news were predictable or already known! Bitcoin has never been connected to any "market fundamentals", just hundreds of day traders trying to predict each others reaction to random scraps of news as they come by.

jpatokal 9y ago
While I agree that most cryptocurrencies are severely disconnected from reality, is your last paragraph really any different from how the stock market works short-term?

koonsolo 9y ago

> Market fundamentals seem non existant here. I think you are looking at the wrong market fundamentals. People getting into bitcoin right now, buy because it can double their money in 6 months. They do not understand anything about Segwit2x. They see news about bitcoin, look at the price again, and say "Damn, why didn't I buy it already?", and buy. That's your market fundamental right now. That is the value of bitcoin right now: "double your money in half a year". I'm not saying bitcoin doesn't have any other value, or that it is overvalued right now.