4 ms·

BTC correction happening?

44 points by sinak 13y ago

ljd 13y ago
Coinbase is down. It probably isn't helping the situation. Wow, as I'm typing this now the market is massively recovering. I just saw it go from 600 to 700 in probably 30 seconds. There are a lot of people doing algo trading with bitcoin.
seansoutpost 13y ago
Yes, it is correcting back to what it was...this morning.
immad 13y ago
Its pretty volatile today. Probably not that interesting for HN to see new posts on it.
deleted 13y ago
[deleted]
andy_ppp 13y ago
Yeah, but it went up to $900. There are a lot of people trying to buy bit coin right now; it's a commodity and people are speculating on it. There is more demand than supply right now IMO.
nyarlathotep 13y ago
I think we have to wait a little longer to make that call. The "correction" seems to be correcting itself now:)
- andy_ppp 13y ago
  Completely - this is a very new commodity market upon which lots of people are speculating. I intend to speculate on it and so do (are) many people in the tech and now wider communities. Worth remembering that at least bitcoin is backed by some value of work, what is USD backed by again? Debt :-D
  - pavpanchekha 13y ago
    That debt is backed by the collective work of the citizens of the US. In total, and discounted by the tax rate, this is far, far more work, and of course far more useful work, than Bitcoin mining.
    - andy_ppp 13y ago
      A debt that can never be repaid, so we'll just print an ever increasing amount of cash and sell gold to make sure no-one realises the dollar is worthless? Obviously, I'm being a little bit facetious...
      - derleth 13y ago
        A little bit facetious and entirely wrong, sure.
  - cgore 13y ago
    The US Dollar is based upon the full faith and credit of the American nuclear weapons stockpile.
    - wwwtyro 13y ago
      Can you give a little more explanation for that claim? It sounds like you're saying the US will blow cities up if people stop accepting the dollar.
      - cgore 13y ago
        It is a snarky form of the statement, but basically the idea is that fiat currency is similar to corporate bonds. If you think General Motors is going to tank, you don't want their bonds, nobody does, they are junk. If Google were to issue a corporate bond series, everyone would eat them up like candy though. Because the USA is the only remaining military superpower in the world, it's fiat currency is going to be #1 in the world. The Eurozone is #2 militarily, and it isn't a coincidence that the Euro currency is also #2. And places like Zimbabwe have jokes for militaries and jokes for currencies. A few years ago someone gave me a 100,000,000 Zimbabwe note as a gag gift.
- sinak 13y ago
  Yep, very true. Things were moving down very quickly (down 30% in 30 mins) when I posted this.
wmf 13y ago
Just normal 25% intraday volatility; nothing to see here.
codemonkeymike 13y ago
If I had a Bitcoin for every prediction that Bitcoins were going to have a correction, I would have more Bitcoins then what exists.
this_user 13y ago
The only surprising thing is how much faster BTC goes through different market phases than other financial instruments. A blow-off, reversal and sell-off like this would take at least days in equities or commodities while this merely took hours. It also appears as if the frequency and amplitude of BTC tops is increasing. This trend actually makes BTC less and less useful as a currency to do business in since you have to hedge your exposure by the hour.
- genericacct 13y ago
  this is what people who do real finance call an illiquid market. Just to give you an idea, all the BTC in the world today were worth more or less as much as FIAT, which is probably the smallest car company out there. An illiquid market is fantastically easy to move.. and rig.
- SwellJoe 13y ago
  It's still such a small market. A single whale can cause a price to fall or rise...a group of whales could "crash" the damned thing for a time. It's also a nerd market. There is algorithmic trading happening at a level that only can happen with firms that have access to the direct feed on the exchanges...BTC allows everyone with enough knowledge to do high frequency trading. But, every day the size of fluctuations that are possible will become smaller. More people holding BTC, more people buying and selling BTC, leads to less ability of a few buyers or sellers to cause a major change. Someone in another recent BTC thread joked (in a "ha ha, only serious" kind of way) that the current speculative nature of the market might get enough people buying into BTC as a lottery ticket kind of purchase to cause the tipping point for it being a viable currency to happen without anyone noticing. If 20 million people in the US held Bitcoins...that's a big market for vendors to want to tap into. It's worth a little risk to get those buyers, as well.
  - betterunix 13y ago
    "Someone in another recent BTC thread joked (in a "ha ha, only serious" kind of way) that the current speculative nature of the market might get enough people buying into BTC as a lottery ticket kind of purchase to cause the tipping point for it being a viable currency to happen without anyone noticing" How is that? It sounds like you will have lots of people with Bitcoin holdings. I do not see a currency, because I do not see where anyone is using Bitcoin as a medium of exchange.
qwertzlcoatl 13y ago
Can somebody with some knowledge about the chinese bank and regulatory system tell me if Bitcoin presents an attractive opportunity for chinese people to buy foreign currency like the Euro and Dollar easily?
- crystaln 13y ago
  Yes. If you have a large amount of Chinese Yuan (CNY), it's very difficult to legally convert that to foreign currency or purchase substantial foreign assets. Foreign exchange is strictly regulated. Until the Chinese government clamps down on BTC China, as I expect they will, bitcoins offer an excellent, possibly even legal, method for Chinese to take their money out of China. It's so useful in fact, that Chinese are willing to pay a 30%+ premium for bitcoin on the Chinese exchange. Note that this same problem also stands in the way of those who might arbitrage the difference in the exchange prices. (I've lived and transacted in China)
  - _delirium 13y ago
    Most of these purchasers are not really a net demand for Bitcoin, though, are they? I see them as mostly using Bitcoin as a short-term intermediary to gain USD or EUR while bypassing exchange controls. So they'll account for, say, 1,000 BTC bought, and 1,000 BTC sold.
    - crystaln 13y ago
      Many of them may not have USD bank accounts overseas, or wish to have the funds associated with their name. I suspect a large amount of the funds are ill-gotten gains from rampant corruption by government officials and cronies. Also, many will probably decide to hold on to at least some bitcoin even if they do have means to convert to foreign currency. Since there is a massive amount of money trying to get out of China - hundreds of billions - it's certainly possible there is significant net demand. If each purchaser keeps 20% of their assets in bitcoin, and $10M is fleeing each day, that's $2M in net demand - enough to influence price significantly at current volumes. The differential between the Chinese exchange and US exchange may partially be explained by Chinese purchasing in China - raising the price - then selling overseas.
PhasmaFelis 13y ago
There seems to be some mistake. I clicked on a news headline, but I got a incomprehensible stream of digits and a graph with no horizontal scale.

44 points by sinak 13y ago

ljd 13y ago

Coinbase is down. It probably isn't helping the situation. Wow, as I'm typing this now the market is massively recovering. I just saw it go from 600 to 700 in probably 30 seconds. There are a lot of people doing algo trading with bitcoin.

seansoutpost 13y ago

Yes, it is correcting back to what it was...this morning.

immad 13y ago

Its pretty volatile today. Probably not that interesting for HN to see new posts on it.

deleted 13y ago

[deleted]

andy_ppp 13y ago

Yeah, but it went up to $900. There are a lot of people trying to buy bit coin right now; it's a commodity and people are speculating on it. There is more demand than supply right now IMO.

nyarlathotep 13y ago

I think we have to wait a little longer to make that call. The "correction" seems to be correcting itself now:)

andy_ppp 13y ago
Completely - this is a very new commodity market upon which lots of people are speculating. I intend to speculate on it and so do (are) many people in the tech and now wider communities. Worth remembering that at least bitcoin is backed by some value of work, what is USD backed by again? Debt :-D
- pavpanchekha 13y ago
  That debt is backed by the collective work of the citizens of the US. In total, and discounted by the tax rate, this is far, far more work, and of course far more useful work, than Bitcoin mining.
  - andy_ppp 13y ago
    A debt that can never be repaid, so we'll just print an ever increasing amount of cash and sell gold to make sure no-one realises the dollar is worthless? Obviously, I'm being a little bit facetious...
    - derleth 13y ago
      A little bit facetious and entirely wrong, sure.
- cgore 13y ago
  The US Dollar is based upon the full faith and credit of the American nuclear weapons stockpile.
  - wwwtyro 13y ago
    Can you give a little more explanation for that claim? It sounds like you're saying the US will blow cities up if people stop accepting the dollar.
    - cgore 13y ago
      It is a snarky form of the statement, but basically the idea is that fiat currency is similar to corporate bonds. If you think General Motors is going to tank, you don't want their bonds, nobody does, they are junk. If Google were to issue a corporate bond series, everyone would eat them up like candy though. Because the USA is the only remaining military superpower in the world, it's fiat currency is going to be #1 in the world. The Eurozone is #2 militarily, and it isn't a coincidence that the Euro currency is also #2. And places like Zimbabwe have jokes for militaries and jokes for currencies. A few years ago someone gave me a 100,000,000 Zimbabwe note as a gag gift.
sinak 13y ago
Yep, very true. Things were moving down very quickly (down 30% in 30 mins) when I posted this.

wmf 13y ago

Just normal 25% intraday volatility; nothing to see here.

codemonkeymike 13y ago

If I had a Bitcoin for every prediction that Bitcoins were going to have a correction, I would have more Bitcoins then what exists.

this_user 13y ago

The only surprising thing is how much faster BTC goes through different market phases than other financial instruments. A blow-off, reversal and sell-off like this would take at least days in equities or commodities while this merely took hours. It also appears as if the frequency and amplitude of BTC tops is increasing. This trend actually makes BTC less and less useful as a currency to do business in since you have to hedge your exposure by the hour.

genericacct 13y ago
this is what people who do real finance call an illiquid market. Just to give you an idea, all the BTC in the world today were worth more or less as much as FIAT, which is probably the smallest car company out there. An illiquid market is fantastically easy to move.. and rig.
SwellJoe 13y ago
It's still such a small market. A single whale can cause a price to fall or rise...a group of whales could "crash" the damned thing for a time. It's also a nerd market. There is algorithmic trading happening at a level that only can happen with firms that have access to the direct feed on the exchanges...BTC allows everyone with enough knowledge to do high frequency trading. But, every day the size of fluctuations that are possible will become smaller. More people holding BTC, more people buying and selling BTC, leads to less ability of a few buyers or sellers to cause a major change. Someone in another recent BTC thread joked (in a "ha ha, only serious" kind of way) that the current speculative nature of the market might get enough people buying into BTC as a lottery ticket kind of purchase to cause the tipping point for it being a viable currency to happen without anyone noticing. If 20 million people in the US held Bitcoins...that's a big market for vendors to want to tap into. It's worth a little risk to get those buyers, as well.
- betterunix 13y ago
  "Someone in another recent BTC thread joked (in a "ha ha, only serious" kind of way) that the current speculative nature of the market might get enough people buying into BTC as a lottery ticket kind of purchase to cause the tipping point for it being a viable currency to happen without anyone noticing" How is that? It sounds like you will have lots of people with Bitcoin holdings. I do not see a currency, because I do not see where anyone is using Bitcoin as a medium of exchange.

qwertzlcoatl 13y ago

Can somebody with some knowledge about the chinese bank and regulatory system tell me if Bitcoin presents an attractive opportunity for chinese people to buy foreign currency like the Euro and Dollar easily?

crystaln 13y ago
Yes. If you have a large amount of Chinese Yuan (CNY), it's very difficult to legally convert that to foreign currency or purchase substantial foreign assets. Foreign exchange is strictly regulated. Until the Chinese government clamps down on BTC China, as I expect they will, bitcoins offer an excellent, possibly even legal, method for Chinese to take their money out of China. It's so useful in fact, that Chinese are willing to pay a 30%+ premium for bitcoin on the Chinese exchange. Note that this same problem also stands in the way of those who might arbitrage the difference in the exchange prices. (I've lived and transacted in China)
- _delirium 13y ago
  Most of these purchasers are not really a net demand for Bitcoin, though, are they? I see them as mostly using Bitcoin as a short-term intermediary to gain USD or EUR while bypassing exchange controls. So they'll account for, say, 1,000 BTC bought, and 1,000 BTC sold.
  - crystaln 13y ago
    Many of them may not have USD bank accounts overseas, or wish to have the funds associated with their name. I suspect a large amount of the funds are ill-gotten gains from rampant corruption by government officials and cronies. Also, many will probably decide to hold on to at least some bitcoin even if they do have means to convert to foreign currency. Since there is a massive amount of money trying to get out of China - hundreds of billions - it's certainly possible there is significant net demand. If each purchaser keeps 20% of their assets in bitcoin, and $10M is fleeing each day, that's $2M in net demand - enough to influence price significantly at current volumes. The differential between the Chinese exchange and US exchange may partially be explained by Chinese purchasing in China - raising the price - then selling overseas.

PhasmaFelis 13y ago

There seems to be some mistake. I clicked on a news headline, but I got a incomprehensible stream of digits and a graph with no horizontal scale.