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Bitcoin's price has fluctuated because of the same market dynamics that play out everywhere. Most people are panicky and hair-triggered, very few are patient.

Bitcoin's price has fluctuated because of the same market dynamics that play out everywhere. Most people are panicky and hair-triggered, very few are patient. Especially with a new technology that has the potential to make outsized returns early on, of course, you're going to get a lot of gamblers entering and exiting the market. This is why you see dips when headlines like "China bans mining!" or "Crypto is doomed, look at Luna!" are printed. It conflates things and uses people's ignorance against them (not unlike traditional financial markets/instruments).

danShumway 4y ago
Correct, and all of that stuff is subject to manipulation, often by powerful actors behind the scenes or by grifters playing off of people's insecurities, fear of missing out, etc... Controlling the supply of a coin does not mean the coin's actual value can't be manipulated by dedicated actors, and in the case of cryptocurrency, the "mystique" of the tech behind it, the ease of creating new systems on top of it that are complicated for ordinary users to understand, and the general fear people have of missing out on a speculative investment (as well as the general fear they have that they might be in a speculative bubble) make coins like Bitcoin particularly vulnerable to specific kinds of social manipulation, scams, and phishing, all of which end up affecting the price of the coin. The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. You haven't gotten rid of currency manipulation, you've just changed who's doing it.
- rglover 4y ago
  > The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. This is why anything that isn't Bitcoin is referred to as a shitcoin, and why the conflating of Bitcoin with everything else is so problematic. The former is designed to prevent that manipulation, the latter leverages it.
  - danShumway 4y ago
    Then we get back to looking at Bitcoin's price chart, and I still think looking at the level of volatility in Bitcoin's price over time shows that it is not really immune from the kind of manipulation you're saying it resists. I mean, if nothing else, shitcoins crashing/spiking regularly cause Bitcoin's price to adjust as well. Tera isn't Bitcoin, but that didn't make Bitcoin immune from volatility when Tera's price crashed; the manipulation techniques that work on shitcoins seem to fairly regularly have knock-on effects on Bitcoin as well. I don't buy that social manipulation has no influence on Bitcoin.
    - rglover 4y ago
      The focus on price relative to USD is too short-term of thinking. The reason I hold the opinion I do is related to scale. A system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to—the market would naturally stabilize as people would be able to use it to pay bills, buy groceries, and the sheer scale of the market couldn't be dictated by a single "whale." Technically that can happen today, but there's a massive psychological gap that needs to be crossed.
      - rootusrootus 4y ago
        > The focus on price relative to USD is too short-term of thinking. What is the incentive for Average Joe to use BTC for transactions while USD exists?
        rglover 4y ago
        For the average Joe? Nothing. Just like there was no incentive to use Facebook when MySpace existed. The average Joe will be the last person to use it daily, just like every other technological invention. That's why they're average.
      - danShumway 4y ago
        I'm curious how you expect Bitcoin to obsolete every single alternative currency/value-store we have today including longstanding systems like gold, when you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use.

danShumway 4y ago

Correct, and all of that stuff is subject to manipulation, often by powerful actors behind the scenes or by grifters playing off of people's insecurities, fear of missing out, etc... Controlling the supply of a coin does not mean the coin's actual value can't be manipulated by dedicated actors, and in the case of cryptocurrency, the "mystique" of the tech behind it, the ease of creating new systems on top of it that are complicated for ordinary users to understand, and the general fear people have of missing out on a speculative investment (as well as the general fear they have that they might be in a speculative bubble) make coins like Bitcoin particularly vulnerable to specific kinds of social manipulation, scams, and phishing, all of which end up affecting the price of the coin. The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. You haven't gotten rid of currency manipulation, you've just changed who's doing it.

rglover 4y ago
> The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. This is why anything that isn't Bitcoin is referred to as a shitcoin, and why the conflating of Bitcoin with everything else is so problematic. The former is designed to prevent that manipulation, the latter leverages it.
- danShumway 4y ago
  Then we get back to looking at Bitcoin's price chart, and I still think looking at the level of volatility in Bitcoin's price over time shows that it is not really immune from the kind of manipulation you're saying it resists. I mean, if nothing else, shitcoins crashing/spiking regularly cause Bitcoin's price to adjust as well. Tera isn't Bitcoin, but that didn't make Bitcoin immune from volatility when Tera's price crashed; the manipulation techniques that work on shitcoins seem to fairly regularly have knock-on effects on Bitcoin as well. I don't buy that social manipulation has no influence on Bitcoin.
  - rglover 4y ago
    The focus on price relative to USD is too short-term of thinking. The reason I hold the opinion I do is related to scale. A system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to—the market would naturally stabilize as people would be able to use it to pay bills, buy groceries, and the sheer scale of the market couldn't be dictated by a single "whale." Technically that can happen today, but there's a massive psychological gap that needs to be crossed.
    - rootusrootus 4y ago
      > The focus on price relative to USD is too short-term of thinking. What is the incentive for Average Joe to use BTC for transactions while USD exists?
      - rglover 4y ago
        For the average Joe? Nothing. Just like there was no incentive to use Facebook when MySpace existed. The average Joe will be the last person to use it daily, just like every other technological invention. That's why they're average.
    - danShumway 4y ago
      I'm curious how you expect Bitcoin to obsolete every single alternative currency/value-store we have today including longstanding systems like gold, when you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use.