6 ms·

You Asked When To Buy Bitcoin...Well Now's Your Chance

31 points by CryptoJunky 13y ago

arbuge 13y ago
Who can say whether this is a good price for Bitcoin, even after the recent drop? The author says this is the time to buy but goes on to say: "I have no crystal ball, and can’t say that Bitcoin is at the lowest price it will be at over the next several days/weeks/months. It may very well be that Bitcoin goes lower" If you want to speculate, try the stock market. It's been around since forever, and you might actually have a bit of an understanding of the fundamentals driving some of the stocks there.
- moocowduckquack 13y ago
  Given the difficulties in buying and selling quickly, at least with bitcoin the game is not currently dominated by HFT algorithms. I'd say that understanding the fundamentals driving the pricing of the modern stock market is at least as difficult as making good bets on bitcoin.
  - vkou 13y ago
    HFT competition is only relevant for day traders. If the author is that financially insightful, he should be stock-picking, and ignore the HFT noise.
salient 13y ago
If you buy it right this minute - yes, it should grow a little more, and you can make a nice profit on it. But is $600+ the price it will stay at from now on? I'm not so sure. I think it will drop to $350 soon, because there's still a lot of uncertainty in the market right now, and there could be some more European countries coming out with bad news for Bitcoin in the next few weeks.
poopsintub 13y ago
Hahaha.
DannoHung 13y ago
When can I actually use Bitcoin as a currency rather than a speculative investment asset? That's when I want to buy Bitcoin.
- CryptoJunky 13y ago
  I can and do for many things. Just loaded my namecheap account last night with some more funds, for instance.
- salient 13y ago
  When it's 30+ percent of the world's transactions? Its market cap needs to be worth trillions before a highly stable price is established. When Bitcoin is truly mainstream and your grandma and grandpa will be having Bitcoin, and don't "panic sell" at every Bitcoin news, it's when Bitcoin's price will be stable. Right now the market is full of people who buy and sell Bitcoin based on the latest news. Those people need to represent a tiny percentage of Bitcoin's market cap before volatility decreases drastically. Of course, when that happens, you shouldn't have major news like "China bans Bitcoin" anymore, since if so many people are using it, then you can assume the legal stuff has already been settled long ago, and most countries are using it, and won't ban it overnight anymore.
- robinhoode 13y ago
  Bitcoin will be stable as soon as everyone considers it too boring to write about.
- guard-of-terra 13y ago
  What is "currency" for you? People refer to "currency" all the time as if it was one thing. Cash is one kind of currency, plastic is another, bank account - yet another, savings - yet another. Converting between those is not instant and not free. Bitcoin works OK as a bank account. That is "currency".
  - collyw 13y ago
    I always thought that Dollars / Euros / Pounds were currencies. The card / cash /bank account are mediums tro represent those currencies. (Now that I have tried putting this into words, I see the whole concept of money / currency is more ambiguous than I originally thought. )
onebaddude 13y ago
History is littered with the corpses of "investors" in various assets who bought all the way down because "this is a great opportunity!" The exponential rise is price is always accepted as "rational", but the equally exponential fall is always explained as temporary or manipulation, or something. A lot of people made money in 2009 when the stock market was incredibly cheap. But it was cheap because there was tangible value that could be calculated based on revenues, earnings, profit margins, etc. If you can't tell me what a Bitcoin should be worth, how do I know it's now cheap? That's speculation.
- pyalot2 13y ago
  There's been no "investor" in the history of investment that made money by buying high and selling low.
  - collyw 13y ago
    From my limited understanding of finance, is that not what short selling is? (Followed by buying back at a reduced price).
    - joering2 13y ago
      You are bit confused. What he meant is that you cannot buy high and sell low and make money, which is obvious. Its bit ironically because people will always tell you buy low sell high, duh, but its easy to say that looking on historical charts, much harder to predict future. You never know if X is high or low for stock Y. Some people are glad they dump on $1,000 but that's silly. They are glad they were lucky because had this thing go to $10,000 they would have felt like winning 5 out of 6 numbers in month-worth accumulation of lotto. Its all pure speculation at this point. Short selling, in short, means you put a bet against commodity that this commodity will not rise up but lose value. Not all stocks/instruments can be "short sell", but you can for example bet against oil. So you say "I don't have any barrels but I can bet with someone this $100 worth of barrel will go down to $50. Can you bet against me?". Then someone comes and says "okay I believe it will be $150; I will buy this virtual security from you" (because you don't have oil at all so you sell virtually, on short sell. So actually you are negative 1 in quantity, someone is positive 1. If the value goes down to $50, you "won". So they need to cover the ride from $100 to $50 and you are $50 richer. They lost. So even if stock tanked, you gain/won. At such a point you actually buy the stock back from him to go from negative 1 to zero. If, however, the stock goes up to $150 you lost $50 because you were negative in quantity and you short sell. So there are people losing money when stock goes up. This mechanism was created many years ago to protect commodities like orange juice or cocoa pricing on stock exchange from large fluctuations.
dobbsbob 13y ago
I needed 0.5 coins last week to test something so I loaned and sold them to test an auto exchange bot @$980. Just bought back 0.5 to repay the small IRC loan @$460. Sweet thanks China
- jusben1369 13y ago
  Puts and calls. Nice.
- glomph 13y ago
  How did you have the trust for someone to lend you $500 without knowing them?
  - dobbsbob 13y ago
    IRC web of trust rating from #bitcoin-otc
pron 13y ago
I have a question that may sound stupid to Bitcoin aficionados, and yet is the first question that comes to my mind whenever I read something like this, and I'm asking it in all seriousness: why would I want to buy Bitcoin (given that I don't wish to profit from Bitcoin speculation)? I get that there is some novelty to using an online crypto-currency. But other than the possible fun factor (which I don't expect to experience) what other reason would there be? Now, I'm not asking about Bitcoin's general merit as a currency. Personally, I believe currencies are better when regulated. But that's not what we're talking about. The question of using an unregulated, deflationary crypto-currency instead of "regular money" for most uses by a large population is a theoretical one at the moment, and will remain so for years to come. My question is about using Bitcoin casually now as a supplement to money. A vanishingly small number of vendors accept it. It is not more secure than money: I keep hearing about Bitcoins stolen from online "banks", and I wouldn't trust myself to keep it securely on my own machine. I don't intend to perform an illegal online transaction. So, why would I want to buy Bitcoin?
- CryptoJunky 13y ago
  I can think of a few reasons... A new approach some merchants have taken is to accept only Bitcoin and thus eliminate payment processing fees. This leads to prices lower than their competitors can reach (stores such as Bitcoinstore.com and Bitcoinin.com). While the 2-3% may not matter much on small purchases, larger orders certainly will. Another aspect is the peer to peer nature of Bitcoin. With Bitcoin you have the ability to send money to any other Bitcoiner, anywhere, instantly. That simply isn't present with traditional currencies. Now there are some inherent difficulties there. For instance, if I need to send money to my family on the other side of the country I can do it instantly, but they still need to be able to translate Bitcoin to whatever good/service they need. Currently that may require translating it into their local currency by some means, as not all that many local/physical merchants accept Bitcoin yet.
  - macspoofing 13y ago
    >A new approach some merchants have taken is to accept only Bitcoin and thus eliminate payment processing fees. Don't count on it. Processing services will rise up to automate various aspects of bitcoin transactions, and you'll still pay those fees.
emirozer 13y ago
Please don't fall into these cheap speculations..Cryptocurrency itself proved that its pure speculation bubble and nothing else.Everybody saw that a few weeks ago when china central bank issued bans / warnings and the markets reaction to it.I believed in crypto currency until a month ago, but now i believe that it is literally impossible for it to take place of a daily currency.Just pump/dump games richer people getting rich, poorer people getting poor.Oh and don't expect it to be adopted by merchants/vendors as anyone who did lost money because of bitcoin's fluctuation..oh by the way out of my head i can assume that %80 of people that has bitcoin only cares about gaining fiat..
jusben1369 13y ago
The only problem here is that part of the run up was based on the sense that China was allowing Bitcoin to flourish. That's pretty powerful in the world's second largest economy with a suspect currency of it's own (highly manipulated for political purposes) If that market opportunity is now closing then that makes Bitcoin much less valuable (at least over the short term) Less demand = smaller price.
- CryptoJunky 13y ago
  You make a good point. If China shuts off entirely then the potential size of Bitcoin's network could decrease significantly. That's not to say however that Bitcoin doesn't still have a significant and increasing network of users. There have been significant gains outside of China as well recently. A large contributor to the high was resultant from the US Senate Hearings which seemed to somewhat validate Bitcoin's legality in the U.S., the world's largest economy.
  - jusben1369 13y ago
    Agreed. I added "Short term" to reflect this is more of a (significant) set back than a downward march. I worry that some might deduce from the article that this is a short term buying opportunity and it'll return to it's previous highs soon. If China is in fact closed it could take a very long time to return to those levels.
    - CryptoJunky 13y ago
      I had originally intended the article to be more of a suggestion to newcomers, that it may be a good time to purchase a bit of Bitcoin if you're looking to get started. It wasn't intended as advice for day traders, but rather for people with long term outlooks trying to enter Bitcoin for the first time, which is what constitutes much of my audience. Rereading I do see how it comes across as short term trading advice though. I suppose I'll have to be much clearer in future posts. Thanks!
aw3c2 13y ago
aka "I just 'lost' a 'fortune' because Bitcoin's exchange rate dropped, please buy Bitcoin for USD so I am 'rich' again!".
gexla 13y ago
I'm not convinced. Like gold, Bitcoin isn't an investment. Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. He would also tell you that you should stick to what you know, otherwise its just gambling. For me, that's investing my time and money into building my own income streams. I don't really care that I could possibly get a return of 10x or more on my money in Bitcoin (or I could lose that much.) I could do the same with my businesses if I do them right, and having everything in Bitcoin would keep me from being able to allocate those resources elsewhere. While the rise in Bitcoin could be a one time thing before it stabilizes (or tanks,) my efforts elsewhere will provide me an income for a lifetime. I'm more interested in using Bitcoin as a currency. A temporary hold for my most liquid assets which I can use to pay bills and other expenses. If I really believe in Bitcoin and want it to succeed, then I know I should try to run some of that activity on what's possible with Bitcoin now. The more mainstream and the larger the Bitcoin market, the more stable it should become. But I'm not interested in risking a large amount of assets to be a revolutionary or financial martyr. ETA: To me, a currency is a place I can park my cash and know that it will hold approximately the same purchasing power as when I put it in there in the first place. I don't care to see it go up (as I said, I have other schemes for making it grow) and I really don't want it to go down. I just want it to be relatively stable. Living in the Philippines for a number of years and working with people around the world, there is 6 different currencies that regularly affect me or the people paying me. Since I have been here, the Peso has gained as much as 20% on the dollar. This sucks and it's not something I want to deal with. Bitcoin would drive me crazy.
- ronaldx 13y ago
  Strictly speaking, you would only lose 1x your money on Bitcoin ;) Otherwise, I agree with what you said. I would prefer to invest in something where their assets will be used to make the world a better place. Not only do I (hopefully) gain long-term value, but also moral satisfaction. If you happen to believe that there will be human value in Bitcoin-as-a-currency, consider investing in the infrastructure rather than the coins.
- JumpCrisscross 13y ago
  >Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. Warren Buffet is an investor, i.e. someone seeking returns from interest, dividends, or capital gains from the reasonable expectation of future interest or dividends. Healthy markets have three other fundamental actors: hedgers, who trade to offset a preëxisting risk, arbitrageurs, who trade to profit from establishing the Law of One Price, and speculators, who absorb excess risk and illiquidity other participants do not want. Speculators absorb the error term. Healthy markets don't function without a proper amount of speculation. So if you believe Bitcoin has fundamental value as an asset and think the upside at least fairly compensates you for the risk, go ahead and absorb that risk. By boosting the asset's value you make it more attractive to others to hold and possibly transact with, thereby giving you a return on your risk. Point is, you may want to speculate or not. I do not. But that doesn't mean we need to moralise investing over speculating any more than an arbitrageur need find himself intellectually superior to investors.
macspoofing 13y ago
You can't have 20-40% weekly swings in an asset and still expect to use it as currency. Neither merchants, nor consumer can trust it, and speculators just sit on it and distort the entire market. I hate that Bitcoin as a currency is almost worthless.
- oznathan 13y ago
  Give it some time. A child crawls before it starts walking.
  - macspoofing 13y ago
    I'd buy that, but bitcoin is inherently deflationary. That's a problem for a currency. The more popular it gets, the worst it gets.
- danoprey 13y ago
  Every new currency has to go through that. That's unavoidable for a small, relatively new currency. With every boom and smaller bust it grows larger and more stable.
  - vkou 13y ago
    New currencies aren't born in a vaccum. When the US switched off the gold standard, the price of a bag of rice at the grocery wasn't changing by 10% every other day.
Thiz 13y ago
Tulips are withering.
kclay 13y ago
I knew I should of withdrew one of my coins when the price reached 1k wouldn't covered my buy in price for 3 coins plus some, o well.
belluchan 13y ago
What a terrible post. It doesn't justify buying bitcoins at all, it's basically squiggly lines go up and down, it just went down, so buy it before it goes back up again because that's what squiggly lines do. At some point he equates the price of bitcoin with bitcoin's long term viability which is also not a convincing argument. bitcoin may have a viable future, but there's no convincing reason why that viable future can't be at $1 per bitcoin.
n00b101 13y ago
Now may be a good time to revisit an old adage of investing: never catch a falling knife.

31 points by CryptoJunky 13y ago

Who can say whether this is a good price for Bitcoin, even after the recent drop? The author says this is the time to buy but goes on to say: "I have no crystal ball, and can’t say that Bitcoin is at the lowest price it will be at over the next several days/weeks/months. It may very well be that Bitcoin goes lower" If you want to speculate, try the stock market. It's been around since forever, and you might actually have a bit of an understanding of the fundamentals driving some of the stocks there.

moocowduckquack 13y ago
Given the difficulties in buying and selling quickly, at least with bitcoin the game is not currently dominated by HFT algorithms. I'd say that understanding the fundamentals driving the pricing of the modern stock market is at least as difficult as making good bets on bitcoin.
- vkou 13y ago
  HFT competition is only relevant for day traders. If the author is that financially insightful, he should be stock-picking, and ignore the HFT noise.

salient 13y ago

If you buy it right this minute - yes, it should grow a little more, and you can make a nice profit on it. But is $600+ the price it will stay at from now on? I'm not so sure. I think it will drop to $350 soon, because there's still a lot of uncertainty in the market right now, and there could be some more European countries coming out with bad news for Bitcoin in the next few weeks.

poopsintub 13y ago

Hahaha.

DannoHung 13y ago

When can I actually use Bitcoin as a currency rather than a speculative investment asset? That's when I want to buy Bitcoin.

CryptoJunky 13y ago
I can and do for many things. Just loaded my namecheap account last night with some more funds, for instance.
salient 13y ago
When it's 30+ percent of the world's transactions? Its market cap needs to be worth trillions before a highly stable price is established. When Bitcoin is truly mainstream and your grandma and grandpa will be having Bitcoin, and don't "panic sell" at every Bitcoin news, it's when Bitcoin's price will be stable. Right now the market is full of people who buy and sell Bitcoin based on the latest news. Those people need to represent a tiny percentage of Bitcoin's market cap before volatility decreases drastically. Of course, when that happens, you shouldn't have major news like "China bans Bitcoin" anymore, since if so many people are using it, then you can assume the legal stuff has already been settled long ago, and most countries are using it, and won't ban it overnight anymore.
robinhoode 13y ago
Bitcoin will be stable as soon as everyone considers it too boring to write about.
guard-of-terra 13y ago
What is "currency" for you? People refer to "currency" all the time as if it was one thing. Cash is one kind of currency, plastic is another, bank account - yet another, savings - yet another. Converting between those is not instant and not free. Bitcoin works OK as a bank account. That is "currency".
- collyw 13y ago
  I always thought that Dollars / Euros / Pounds were currencies. The card / cash /bank account are mediums tro represent those currencies. (Now that I have tried putting this into words, I see the whole concept of money / currency is more ambiguous than I originally thought. )

onebaddude 13y ago

History is littered with the corpses of "investors" in various assets who bought all the way down because "this is a great opportunity!" The exponential rise is price is always accepted as "rational", but the equally exponential fall is always explained as temporary or manipulation, or something. A lot of people made money in 2009 when the stock market was incredibly cheap. But it was cheap because there was tangible value that could be calculated based on revenues, earnings, profit margins, etc. If you can't tell me what a Bitcoin should be worth, how do I know it's now cheap? That's speculation.

pyalot2 13y ago
There's been no "investor" in the history of investment that made money by buying high and selling low.
- collyw 13y ago
  From my limited understanding of finance, is that not what short selling is? (Followed by buying back at a reduced price).
  - joering2 13y ago
    You are bit confused. What he meant is that you cannot buy high and sell low and make money, which is obvious. Its bit ironically because people will always tell you buy low sell high, duh, but its easy to say that looking on historical charts, much harder to predict future. You never know if X is high or low for stock Y. Some people are glad they dump on $1,000 but that's silly. They are glad they were lucky because had this thing go to $10,000 they would have felt like winning 5 out of 6 numbers in month-worth accumulation of lotto. Its all pure speculation at this point. Short selling, in short, means you put a bet against commodity that this commodity will not rise up but lose value. Not all stocks/instruments can be "short sell", but you can for example bet against oil. So you say "I don't have any barrels but I can bet with someone this $100 worth of barrel will go down to $50. Can you bet against me?". Then someone comes and says "okay I believe it will be $150; I will buy this virtual security from you" (because you don't have oil at all so you sell virtually, on short sell. So actually you are negative 1 in quantity, someone is positive 1. If the value goes down to $50, you "won". So they need to cover the ride from $100 to $50 and you are $50 richer. They lost. So even if stock tanked, you gain/won. At such a point you actually buy the stock back from him to go from negative 1 to zero. If, however, the stock goes up to $150 you lost $50 because you were negative in quantity and you short sell. So there are people losing money when stock goes up. This mechanism was created many years ago to protect commodities like orange juice or cocoa pricing on stock exchange from large fluctuations.

dobbsbob 13y ago

I needed 0.5 coins last week to test something so I loaned and sold them to test an auto exchange bot @$980. Just bought back 0.5 to repay the small IRC loan @$460. Sweet thanks China

jusben1369 13y ago
Puts and calls. Nice.
glomph 13y ago
How did you have the trust for someone to lend you $500 without knowing them?
- dobbsbob 13y ago
  IRC web of trust rating from #bitcoin-otc

pron 13y ago

I have a question that may sound stupid to Bitcoin aficionados, and yet is the first question that comes to my mind whenever I read something like this, and I'm asking it in all seriousness: why would I want to buy Bitcoin (given that I don't wish to profit from Bitcoin speculation)? I get that there is some novelty to using an online crypto-currency. But other than the possible fun factor (which I don't expect to experience) what other reason would there be? Now, I'm not asking about Bitcoin's general merit as a currency. Personally, I believe currencies are better when regulated. But that's not what we're talking about. The question of using an unregulated, deflationary crypto-currency instead of "regular money" for most uses by a large population is a theoretical one at the moment, and will remain so for years to come. My question is about using Bitcoin casually now as a supplement to money. A vanishingly small number of vendors accept it. It is not more secure than money: I keep hearing about Bitcoins stolen from online "banks", and I wouldn't trust myself to keep it securely on my own machine. I don't intend to perform an illegal online transaction. So, why would I want to buy Bitcoin?

CryptoJunky 13y ago
I can think of a few reasons... A new approach some merchants have taken is to accept only Bitcoin and thus eliminate payment processing fees. This leads to prices lower than their competitors can reach (stores such as Bitcoinstore.com and Bitcoinin.com). While the 2-3% may not matter much on small purchases, larger orders certainly will. Another aspect is the peer to peer nature of Bitcoin. With Bitcoin you have the ability to send money to any other Bitcoiner, anywhere, instantly. That simply isn't present with traditional currencies. Now there are some inherent difficulties there. For instance, if I need to send money to my family on the other side of the country I can do it instantly, but they still need to be able to translate Bitcoin to whatever good/service they need. Currently that may require translating it into their local currency by some means, as not all that many local/physical merchants accept Bitcoin yet.
- macspoofing 13y ago
  >A new approach some merchants have taken is to accept only Bitcoin and thus eliminate payment processing fees. Don't count on it. Processing services will rise up to automate various aspects of bitcoin transactions, and you'll still pay those fees.

emirozer 13y ago

Please don't fall into these cheap speculations..Cryptocurrency itself proved that its pure speculation bubble and nothing else.Everybody saw that a few weeks ago when china central bank issued bans / warnings and the markets reaction to it.I believed in crypto currency until a month ago, but now i believe that it is literally impossible for it to take place of a daily currency.Just pump/dump games richer people getting rich, poorer people getting poor.Oh and don't expect it to be adopted by merchants/vendors as anyone who did lost money because of bitcoin's fluctuation..oh by the way out of my head i can assume that %80 of people that has bitcoin only cares about gaining fiat..

jusben1369 13y ago

The only problem here is that part of the run up was based on the sense that China was allowing Bitcoin to flourish. That's pretty powerful in the world's second largest economy with a suspect currency of it's own (highly manipulated for political purposes) If that market opportunity is now closing then that makes Bitcoin much less valuable (at least over the short term) Less demand = smaller price.

CryptoJunky 13y ago
You make a good point. If China shuts off entirely then the potential size of Bitcoin's network could decrease significantly. That's not to say however that Bitcoin doesn't still have a significant and increasing network of users. There have been significant gains outside of China as well recently. A large contributor to the high was resultant from the US Senate Hearings which seemed to somewhat validate Bitcoin's legality in the U.S., the world's largest economy.
- jusben1369 13y ago
  Agreed. I added "Short term" to reflect this is more of a (significant) set back than a downward march. I worry that some might deduce from the article that this is a short term buying opportunity and it'll return to it's previous highs soon. If China is in fact closed it could take a very long time to return to those levels.
  - CryptoJunky 13y ago
    I had originally intended the article to be more of a suggestion to newcomers, that it may be a good time to purchase a bit of Bitcoin if you're looking to get started. It wasn't intended as advice for day traders, but rather for people with long term outlooks trying to enter Bitcoin for the first time, which is what constitutes much of my audience. Rereading I do see how it comes across as short term trading advice though. I suppose I'll have to be much clearer in future posts. Thanks!

aw3c2 13y ago

aka "I just 'lost' a 'fortune' because Bitcoin's exchange rate dropped, please buy Bitcoin for USD so I am 'rich' again!".

gexla 13y ago

I'm not convinced. Like gold, Bitcoin isn't an investment. Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. He would also tell you that you should stick to what you know, otherwise its just gambling. For me, that's investing my time and money into building my own income streams. I don't really care that I could possibly get a return of 10x or more on my money in Bitcoin (or I could lose that much.) I could do the same with my businesses if I do them right, and having everything in Bitcoin would keep me from being able to allocate those resources elsewhere. While the rise in Bitcoin could be a one time thing before it stabilizes (or tanks,) my efforts elsewhere will provide me an income for a lifetime. I'm more interested in using Bitcoin as a currency. A temporary hold for my most liquid assets which I can use to pay bills and other expenses. If I really believe in Bitcoin and want it to succeed, then I know I should try to run some of that activity on what's possible with Bitcoin now. The more mainstream and the larger the Bitcoin market, the more stable it should become. But I'm not interested in risking a large amount of assets to be a revolutionary or financial martyr. ETA: To me, a currency is a place I can park my cash and know that it will hold approximately the same purchasing power as when I put it in there in the first place. I don't care to see it go up (as I said, I have other schemes for making it grow) and I really don't want it to go down. I just want it to be relatively stable. Living in the Philippines for a number of years and working with people around the world, there is 6 different currencies that regularly affect me or the people paying me. Since I have been here, the Peso has gained as much as 20% on the dollar. This sucks and it's not something I want to deal with. Bitcoin would drive me crazy.

ronaldx 13y ago
Strictly speaking, you would only lose 1x your money on Bitcoin ;) Otherwise, I agree with what you said. I would prefer to invest in something where their assets will be used to make the world a better place. Not only do I (hopefully) gain long-term value, but also moral satisfaction. If you happen to believe that there will be human value in Bitcoin-as-a-currency, consider investing in the infrastructure rather than the coins.
JumpCrisscross 13y ago
>Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. Warren Buffet is an investor, i.e. someone seeking returns from interest, dividends, or capital gains from the reasonable expectation of future interest or dividends. Healthy markets have three other fundamental actors: hedgers, who trade to offset a preëxisting risk, arbitrageurs, who trade to profit from establishing the Law of One Price, and speculators, who absorb excess risk and illiquidity other participants do not want. Speculators absorb the error term. Healthy markets don't function without a proper amount of speculation. So if you believe Bitcoin has fundamental value as an asset and think the upside at least fairly compensates you for the risk, go ahead and absorb that risk. By boosting the asset's value you make it more attractive to others to hold and possibly transact with, thereby giving you a return on your risk. Point is, you may want to speculate or not. I do not. But that doesn't mean we need to moralise investing over speculating any more than an arbitrageur need find himself intellectually superior to investors.

macspoofing 13y ago

You can't have 20-40% weekly swings in an asset and still expect to use it as currency. Neither merchants, nor consumer can trust it, and speculators just sit on it and distort the entire market. I hate that Bitcoin as a currency is almost worthless.

oznathan 13y ago
Give it some time. A child crawls before it starts walking.
- macspoofing 13y ago
  I'd buy that, but bitcoin is inherently deflationary. That's a problem for a currency. The more popular it gets, the worst it gets.
danoprey 13y ago
Every new currency has to go through that. That's unavoidable for a small, relatively new currency. With every boom and smaller bust it grows larger and more stable.
- vkou 13y ago
  New currencies aren't born in a vaccum. When the US switched off the gold standard, the price of a bag of rice at the grocery wasn't changing by 10% every other day.

Thiz 13y ago

Tulips are withering.

kclay 13y ago

I knew I should of withdrew one of my coins when the price reached 1k wouldn't covered my buy in price for 3 coins plus some, o well.

belluchan 13y ago

What a terrible post. It doesn't justify buying bitcoins at all, it's basically squiggly lines go up and down, it just went down, so buy it before it goes back up again because that's what squiggly lines do. At some point he equates the price of bitcoin with bitcoin's long term viability which is also not a convincing argument. bitcoin may have a viable future, but there's no convincing reason why that viable future can't be at $1 per bitcoin.

n00b101 13y ago

Now may be a good time to revisit an old adage of investing: never catch a falling knife.