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then the other risk here is liquidity. how deep is BTC liquidity so that prices are not affected by businesses instantly exchanging to USD, EUR, etc.?

by antr 13y ago

bdcs 13y ago
The payment processor (eg BitPay) takes that on. Markets are still razor thin by fiat currency standards, but are 10x to 100x thicker than a year ago. For example, buying 1.5 million USD instantly would raise the price about 4% (using just one exchange, Bitstamp)
oscilloscope 13y ago
There was a prolonged dip in the price in this weekend, and I was wondering if this had an effect. There've been many large Bitcoin transactions recently, especially on Bitcoin Black Friday. For instance, Amagi Metals apparently sold $900,000 worth of gold and silver for Bitcoin using Bitpay as their processor. That alone is currently a significant volume to liquidate. Enough to move the price 4-5% on some exchanges. Bitpay only takes a ~1% fee, but I assume their exchange rate is padded to absorb some of that risk. They may also sell bitcoin off the exchanges, which doesn't have a direct impact on the price.
- kolev 13y ago
  BitPay takes 1% if you're on the free plan. Otherwise, there's just a monthly fee (well, you need to be on the $300/mo plan to get unlimited volume otherwise you're limited to $300,000/mo and $10,000/transaction)! https://bitpay.com/pricing https://bitpay.com/pricing
jypepin 13y ago
according to blockchain.info (https://blockchain.info/charts/estimated-transaction-volume?timespan=180days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/estimated-transaction-volume?...) seems like about 150 000 bitcoins a day are being traded. So I assume liquidity is already good enough for almost every business.
- kolev 13y ago
  Sometimes, a purchase or a sale of Bitcoins in the hundreds can take the market up and down by as much as 5-10% depending on the order book. I'm not sure if anybody has noticed, but Coinbase bases the price on quantity as they need to place a market order and then you depending on Bitstamp's order book state at the moment, the price difference can be huge! How are you gonna explain to consumers that they have to pay more, because they're placing a bigger order?
- apw 13y ago
  Since most transactions are on the order of 1/1000 of a Bitcoin, it's useful to rephrase what you said as: around 150 million mBTC are being transacted (on the blockchain) per day.

then the other risk here is liquidity. how deep is BTC liquidity so that prices are not affected by businesses instantly exchanging to USD, EUR, etc.?

by antr 13y ago

then the other risk here is liquidity. how deep is BTC liquidity so that prices are not affected by businesses instantly exchanging to USD, EUR, etc.?

bdcs 13y ago

The payment processor (eg BitPay) takes that on. Markets are still razor thin by fiat currency standards, but are 10x to 100x thicker than a year ago. For example, buying 1.5 million USD instantly would raise the price about 4% (using just one exchange, Bitstamp)

oscilloscope 13y ago

There was a prolonged dip in the price in this weekend, and I was wondering if this had an effect. There've been many large Bitcoin transactions recently, especially on Bitcoin Black Friday. For instance, Amagi Metals apparently sold $900,000 worth of gold and silver for Bitcoin using Bitpay as their processor. That alone is currently a significant volume to liquidate. Enough to move the price 4-5% on some exchanges. Bitpay only takes a ~1% fee, but I assume their exchange rate is padded to absorb some of that risk. They may also sell bitcoin off the exchanges, which doesn't have a direct impact on the price.

kolev 13y ago
BitPay takes 1% if you're on the free plan. Otherwise, there's just a monthly fee (well, you need to be on the $300/mo plan to get unlimited volume otherwise you're limited to $300,000/mo and $10,000/transaction)! https://bitpay.com/pricing https://bitpay.com/pricing

jypepin 13y ago

according to blockchain.info (https://blockchain.info/charts/estimated-transaction-volume?timespan=180days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/estimated-transaction-volume?...) seems like about 150 000 bitcoins a day are being traded. So I assume liquidity is already good enough for almost every business.

kolev 13y ago
Sometimes, a purchase or a sale of Bitcoins in the hundreds can take the market up and down by as much as 5-10% depending on the order book. I'm not sure if anybody has noticed, but Coinbase bases the price on quantity as they need to place a market order and then you depending on Bitstamp's order book state at the moment, the price difference can be huge! How are you gonna explain to consumers that they have to pay more, because they're placing a bigger order?
apw 13y ago
Since most transactions are on the order of 1/1000 of a Bitcoin, it's useful to rephrase what you said as: around 150 million mBTC are being transacted (on the blockchain) per day.