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Bitcoin approaching $1000
- mrb 13y agoIt already surpassed $1000 last week, on BTCChina (world's largest Bitcoin exchange): http://blog.zorinaq.com/?e=75 http://blog.zorinaq.com/?e=75
- sixQuarks 13y agowhy are there all different prices? which one is correct?
- kilovoltaire 13y agoAs I understand it, exchanges where it's hard to get your money out as USD (e.g. Mt. Gox) have high USD exchange rates, whereas places where it's easier (e.g. BTC-E) have lower rates. In theory if the exchanges were all equivalent in this regard then the rates would pretty quickly stabilize, because people would use USD to buy BTC low on BTC-E, send it (as BTC / for almost free) to Mt. Gox, then sell the BTC high on Mt. Gox for way more USD, and repeat and profit until the rates converge. (see "arbitrage") But it's not easy to get USD out of Mt. Gox last I checked, so that doesn't seem to happen.
- jat850 13y agoThere's no "correct" price. The price is dependent on exchange - it's a supply and demand aspect. All the exchanges do is reflect what the latest transactions respectively. You could buy bitcoins in a private transaction for any price. There is obviously some potential for arbitrage here but it's probably risky given the volatile nature right now.
- moocowduckquack 13y agoThe one you can get.
- Zircom 13y agoDifferent exchanges trade at different rates.
- bcoates 13y agoThe exchanges are illiquid as all hell, so arbitrage carries a lot of risk. Bitcoin is a nice demonstration that market efficiency isn't magic, but has underlying rational-actor mechanisms that will break down in exceptional circumstances.
- tagawa 13y agoEach exchange's price is correct - it's just price variation based on multiple factors, similar to how a can of coke can be priced differently in various shops. E.g. if you intend to trade with MtGox, their price is the one you should be concerned with. Virtual currencies are still a relatively minor market so there's more discrepancy between exchanges compared to, say, mainstream currency or stock trading.
- lsc 13y agoThis is actually... an interesting question, though badly put. The naive answer is that a 'correct' price is what someone else will pay for your good, and different people in different markets are willing to pay different prices. The thing is, the prices at which trades are executed on different exchanges vary by more than 10%, and as far as I can tell, there's nothing stopping a single actor from participating on all exchanges at once. Now, if the difference between the odds one bookie is offering on next week's met's games and another bookie is greater than the vig, someone is going to come in and arbitrage it. at this moment MT.GOX 954.00 BTC-E 858.21 Now, I'm pretty sure that none of the bitcoin exchanges take a 10% cut, so what's going on here? how come nobody is buying on the lower priced exchange and selling on the higher priced exchange? (or rather, how come that behavior hasn't resulted in fairly even prices across exchanges?)
- jbaudanza 13y agoIt is difficult to withdraw USD from MtGox. There are large fees for bank transfers and it can take weeks for mtgox to process. For this reason, there are fewer sellers on MtGox which means the price is inflated.
- new299 13y agoBecause it's hard to get cash out of Mtgox and the price reflects that fact (few people cash out dollars on Mtgox, but I think more trading goes on). That's also the reason you can't just buy low and sell high, the cash out time is 2 weeks, and a lot can happen in 2 weeks.
- tedkalaw 13y agoIt is EXTREMELY difficult to get money into BTC-E. You have to go through multiple currency exchangers which each take a cut of the action. It takes a lot of time and is annoying as hell.
- conception 13y agoThere were a number of answers, but if you actually work out the math, outside of big jumps where one exchange may be moving too fast for people doing arbitrage, with all the fees and transfer costs, the prices work out to be about the same. So, BTC-E has a 1% fee, plus whatever cost it took you to do the International Wire Transfer (say $35 bucks). That already gets you to ~$900. So, you get into Gox and sell. Well, that's 2200 JPY, you have to pay for the wire, $920, plus your bank probably charges you $20 for receiving a wire, $940... and that's before the 4 weeks+ it takes for Gox to get you your money + the trading fees. It may look like there's room for arbitrage but the price differences, for the most part, do take all costs into effect. (PS Yes, I know the wire transfer fees can be lowered in terms of percentage of the cost by transferring more money at once; it's just a simple illustrative example.)
- rwinn 13y agohttp://realtimebitcoin.info http://realtimebitcoin.info shows a weighted average from the 3 largest exchanges
- eof 13y ago"Which one is correct" is a philosophically hilarious notion! but, the prices are different primarily because of cost (in terms of fees for wire transfers and third parties) of getting money in and out of the exchange, ease of doing so (gox is pretty cheap but is taking like 30+ days to get paid), and just access (much harder for chinese to be on gox than btcchina and china also has strict capital control laws that bitcoin seems to be an easy loophole around). Similar to why cocaine is cheaper in colombia (or miami) than NYC or bumfuck kentucky.
- donpdonp 13y agohttps://cointhink.com/arbitrage/btcusd https://cointhink.com/arbitrage/btcusd charts mtgox/btce/bitstamp and calculates the amount of arbitrage between the exchanges. It uses the orderbooks of each exchange to tally the amount available for arbitrage.
- jjoe 13y agoThe question is will it retreat into the sub $500 level like it did a week ago. Nonetheless I'm seeing stronger support even at the $800 level.
- yeukhon 13y agoIt was 250 like two weeks ago.... how the hell can anyone get into the market with this high value these days -_-
- whackedspinach 13y agoYou just buy less BTC, I suppose.
- tagawa 13y agoAnyone can still get into the market - you can pay $10 and receive a certain amount of Bitcoins in return. It's not like the housing market where high prices mean you can potentially not make a purchase. EDIT: To clarify my comment - I meant the housing market as in the ability to buy a home outright.
- aaron695 13y agoAnyone can get into the property market with $10, there's lots of managed funds out there that deal with property. But the reason people don't see the value in these is because you want to gamble low and win high. These managed funds more accurately show the real market, not the in your head looking at the few people who bought really low and sold really high while ignoring people who have lost money. (Yes housing is a little different since in many places there are tax advantages on property you'll only get if your name is on the dead.)
- eru 13y agoYou could buy a fraction of a company that rents out houses.
- captainarab 13y agoLooking at the volume/quantity of BTC trades, its pretty clear that this is a demand driven price increase. Given all of the new investors, how many of them will stay and how severely will demand be impacted with the next seriously negative market event?
- 300bps 13y agoGiven all of the new investors How many people buying bitcoins are investors and how many people are just trying to buy something with a transaction that can't be traced back to them? That's a big draw to Bitcoin right now. To investors, the price you pay matters. To people just trying to buy goods and services with it, it doesn't matter if Bitcoin is at $50, $100, $2000 or $20000.
- bytefactory 13y agoIt will, if the timeframes for these fluctuations are rapid enough. Imagine converting $1000 of USD you've converted this morning, and by tomorrow when you actually go in to place the order, the price has dropped to $800. You've lost $200 worth of purchasing power overnight!
- deleted 13y ago[deleted]
- josu 13y agoI'm not sure that the volume is reflecting an increase in demand, at least not a tenfold increase in demand in just a couple of months. The increment in volume can be the consequence of increased daytrading activity. Once the price started shooting a lot of volatility was introduced in the system, which allowed daytrading. Many arbitrage opportunities also opened up, which probably moved the volume up as well. Yes, it seems like bitcoin is catching up some speed, but I don't think that this sudden spike in price is demand driven.
- wmf 13y agoGiven that demand started from near zero in China, tenfold growth after legalization of Bitcoin doesn't surprise me at all. The movement in the BTC-USD market looks like arbitrage catching up to the Chinese activity.
- analog31 13y agoIf nothing else, watching the up's and down's of Bitcoin is a motivation to think about what life would be like in an economy where currency is volatile.
- deleted 13y ago[deleted]
- thiagoperes 13y agoThis reality is just a plane ticket away: http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
- mmaunder 13y ago...which is an interesting use case as bitcoin as an alternative currency. Africa is full of migrant workers in less stable economies who need to send money home at low cost and with no delay. e.g In South Africa you can buy a code at a grocery store that you can SMS to your family back home, they go to their local branch of the store and get the funds by giving the code. But it costs and it's slower than BTC. Also banking in Africa is notoriously expensive due to the low per-account balances depositors keep. You pay to put money in, you pay to take it out. A fertile environment for a currency ruled by the laws of nature and math rather than assholes and exploiters.
- drcode 13y ago
- grandalf 13y agoI think this is going to become known as the way the Winklevoss twins made their mark (when they sell).
- a3voices 13y agoThe twins are expecting it to go to a $100 billion market cap, so I don't see them selling any time soon.
- hcal 13y agoWhat they claim to expect and what they actually expect are probably a bit different. It wouldn't be surprising to see them sell much earlier than they publicly indicate.
- brosco45 13y agoSoon, a million
- andy_ppp 13y agoBig sell off end of the year, but I'm hedging by trying to buy some now. It's a finite commodity of real utility and value. It's recognised as legal by the US government (and it's not anonymous). I will be laughed at but I'm going to suggest this time next year it'll be worth $10000 per bitcoin :-D
- dustingetz 13y agoPretty sure no human is buying BTC at $1k, this spike has got to be HFT bots arbing across exchanges or making tiny trades, every human is thinking "cool im smart so ill buy when it crashes"
- bello 13y agoI don't think markets work like that.
- deleted 13y ago[deleted]
- ars_technician 13y agoWow, it takes guts to comment on something you clearly know nothing about. For arb to exist, someone has to be buying at that price somewhere.
- wyrmlet 13y agoWould someone please explain how to interpret this or link me to explanation? The y axes are not labeled, and I am not familiar enough with exchanges to infer. Thanks!
- teraflop 13y agoThe graphs are pulled from http://bitcoinity.org/markets http://bitcoinity.org/markets which, if you click on the "wtf?" link in the top right, provides an explanation. The line graph shows the current market price of 1 BTC, using the right y-axis which is in US dollars. It's overlaid on a bar graph of trading volume in BTC, which uses the left y-axis.
- wyrmlet 13y agoPerfect!
- rms 13y agoI've been using https://bitcoinaverage.com/ https://bitcoinaverage.com/
- mikecane 13y agoDigital Tulipmania. http://en.wikipedia.org/wiki/Tulipmania http://en.wikipedia.org/wiki/Tulipmania
- jnbiche 13y agoThat's all you got?
- georgemcbay 13y agoAt least a tulip is an actual thing that looks nice, bitcoin is some data in a file that was created by pissing away energy, the perfect embodiment for the ridiculousness of modern economics. It is mindboggling to me that people take it seriously. It is a perfect example of a tulipmania-like house of cards.
- beedogs 13y agoLitecoin is nearing $20 as well, and still relatively easy to mine. In fact, many of the altcoins are skyrocketing in value now that the Chinese exchanges have opened.
- m1 13y agoAny estimates on when/if a crash will come and how much will it fall to?
- MattyRad 13y agoA lot of people bearish on Bitcoin's future claim that it cannot last and the fad will be extinguished because it isn't backed by something, like gold, or a government. I would like somebody to explain why gold is inherently valuable, or why government support is necessary. All I've really read on the subject is that "gold is inherently valuable because it's always had value, historically." Could someone elaborate?
- brainburn 13y agoThe problem with governments is that they will stop at nothing (well, maybe murder) to make you comply with what they want.
- deleted 13y ago[deleted]
- aet 13y agoDo you want corporations in control or government? You can't vote corporations out. You can vote government out.
- analog31 13y agoGold is volatile too.
- bunderbunder 13y agoGold is inherently valuable because you can use it to do things like protect circuit contacts from corrosion, or protect astronauts from solar radiation. Government-backed currency isn't inherently valuable, per se, but for residents of many countries it's useful stuff to have because you need it to pay your taxes, and there's often a statutory obligation to accept it as a form of payment for settling debts. Neither of those uses necessarily accounts for 100% of the value of either gold or fiat currency. (Arguably, not even close.) But they do place a kind of floor under their values. For gold it's a fairly absolute floor - there'll always be uses for gold, so it'll always have at least some value. For a national currency that isn't necessarily the case, as the case of the Zimbabwean dollar famously illustrates. However, when the currency is backed by a nation with a strong, stable economy then in theory (and, so far, in practice) that provides sufficient protection against the worst extremes of volatility. Bitcoin, by contrast, is working without a net. Naturally that isn't a problem if it doesn't need a net. But there's an argument to be made that every currency is primarily fueled by human psychology, and every Dumbo likes to have his feather to hold.
- pnispel 13y agoSomething I've been thinking about is if the entirety of currency in the US was represented in bitcoin (bitcoins were the currency rather than dollars), how much would each be worth? So there is about $1.2 trillion in circulation [1] and the cap for bitcoins is 21,000,000 1.2 trillion / 21 million ~= $57,142 per bitcoin Is this right, or am I missing something? [1] - http://www.federalreserve.gov/faqs/currency_12773.htm http://www.federalreserve.gov/faqs/currency_12773.htm
- conception 13y ago1.2 trillion in physical currency. You want the M2 number (http://www.tradingeconomics.com/united-states/money-supply-m2 http://www.tradingeconomics.com/united-states/money-supply-m...) which is about 11 trillion. So about another order of magnitude there.
- adamb_ 13y agoIf it reaches $1000, will mining bitcoins be considered a worthwhile endeavor again?
- brownbat 13y ago1. As profitability goes up, more people join in, increasing the difficulty factor, reducing the profitability. 2. If deflation continues, you're probably better off just investing in coins. Here's a profitability calculator where you can play with values (it starts with some reasonable defaults). (I can't tell if it accurately captures earnings from transfer fees though...)
- brownbat 13y agoEDIT: http://www.bitcoinx.com/profit/ http://www.bitcoinx.com/profit/