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Does anyone have an opinion on why the price of Bitcoin doesn't seem to move on news like this? It seems significant in my opinion and I would think that wider

Does anyone have an opinion on why the price of Bitcoin doesn't seem to move on news like this? It seems significant in my opinion and I would think that wider acceptance would lead to a higher price, but that hasn't been the case over the past few weeks / announcements.

battani 13y ago
It's easy for merchants to accept bitcoin, because they always propose it alongside a CC payment alternative. And they never risk anything, because they only ever touch USD. So it's all gain for them. (This is more a marketing stunt to drive traffic to Square Market, more than anything else. Square Market has been having trouble competing with more common marketplaces such as Shopify and Amazon). This doesn't affect consumer adoption though, which is what investors/traders would be looking at. Also, if the number of bitcoin transactions through such methods goes up, BTC/USD is more likely to go down. Any bitcoin sent to a Square merchant will be picked up by Coinbase and sold at the bid price on the bitcoin markets, which will pressure price action down. (Coinbase then takes the USD from that sell and transfers them to Square).
gnopgnip 13y ago
It doesn't make it any easier to acquire bitcoins in the first place. When you already have a debit/credit card there is no reason to use bitcoins to shop with square.
plaguuuuuu 13y ago
A $10 t-shirt will still cost $10 worth of bitcoins. Whether that winds up being 1 or 1000 bitcoins is totally irrelevant. There's no intrinsic value
- rpearl 13y ago
  Your statement is useless, which is why it has been downvoted. It misses the essence of what currency is. Volatility makes bitcoin a poor store of value: you should not leave assets in bitcoin that you cannot afford to lose, because those assets may vary in actual value (meaning, might vary in what someone else is willing to pay for it) substantially over time: $10,000 of bitcoin today might be $5,000 tomorrow. Volatility makes bitcoin a poor medium of exchange: if I wish to sell something with bitcoin, I take on large risk that the value of my transaction might change. The t-shirt I sold for $10 today might yield me only $2 tomorrow. So, it is accurate to say that there is no intrinsic value to a bitcoin--but this statement is meaningless. $10 is also not an intrinsic value--currency is only relevant as a unit of account or a medium of exchange. Things only have value relative to each other. We use currency to assign a numeric value to each object.
thesimpsons1022 13y ago
the real answer is it is being overshadowed by the fact that one of the exchanges stopped allowing CNY withdrawals. I don't think any of the other answerers actually follow bitcoin.
- davidblair 13y ago
  Deposits have been restricted at this time, not withdrawals.
pmorici 13y ago
Wider acceptance takes time to affect the price, it's more of a long term rather than short term price driver. If anything, in the near term something like this puts selling pressure on BTC because the first people to give this a try are going to be people who already own Bitcoin and Square's merchants probably aren't holding any BTC sales proceeds.
Lerc 13y ago
It seems to be following a repeating pattern. * Bitcoin builds infrastructure. * People notice bitcoin isn't going away * Media says Bitcoin will make everyone Gazillionairres * Bitcoin skyrockets until infrastructure comes under strain. * Something involved with bitcoin breaks * Media(not neccisarrily the same media) says Bitcoin is all over, and everybody will lose their bitoin, their home, and their dog. * Price drops. * Bitcoin builds infrastructure. * People notice bitcoin isn't going away We seem be going into the build infrastructure phase. That's where genuine value actually gets added, and doesn't actually stop at the other times, It's just when the craziness is going on it's hard to see from the noise.
- ycombasks 13y ago
  > * Bitcoin skyrockets until infrastructure comes under strain. Source? Unless you consider the failure of Mt. Gox an "infrastructure" problem, then this is not the case.
  - acchow 13y ago
    It's hard to see how that wasn't an "infrastructure" problem. Mt Gox was the largest BTC exchange - an integral bridge from old world to BTC world.
  - Lerc 13y ago
    Not the failure of MtGox, but their day to day operations were significantly impacted during the peak hype. Other Exchanges had problems, I remember the "you can have bitcoin next friday, when we've got some ourselves" episode (bitinstant perhaps?). Even the most prepared business are going to have trouble when everyone decides to come knocking on your door in in the space of a fortnight. You can prepare for rapid scaling, but you can't hire and train people overnight.
- contingencies 13y ago
  You miss many elements with this summary, not the least of which is Bitcoin reaching a point of maturity with regards to regulation and compliance. To a large extent, that's happening next week in DC.
vladimirralev 13y ago
If anything the price should go down. When people buy things with bitcoins they are effectively selling bitcoins transitively driving the price down. If you want the price go up there have to be incentives to buy stuff with bitcoins such as lower prices. For many people it is cheaper to use bitcoins because they bought-in early, but that would be equivalent of cashing out their position and exposing their identity to the merchant, which most of the early adopters either don't want to do or would have done already when it was more favorable.
- joshuak 13y ago
  Well, unlike most currencies or commodities bitcoin can be traded at volume for currencies outside of a monitored environment. This means using bitcoins in a trisection does not effect the trading price, and people could trade in 'dark pools' or face to face for amounts significantly above or below the current 'market value' while having no effect on the market price at all. Even if it where tracked people buying things with bitcoin can just as easily drive the prices up as down. As with all transactions you must take into account the value of both sides of the transaction.
3pt14159 13y ago
Recently a large number of bitcoins were stolen from a major exchange. The hackers will be liquidating these over a long period of time, exerting downward pressure on the price.
johnpmayer 13y ago
Well, personally, I'm still paid in dollars. And dollars can already be used in all of these places.
tomasien 13y ago
It's not actually big news, is what I would say. Square is prominent to us because we know how it's growing, but it doesn't represent some insane amount of volume and this is only Square Market. It doesn't really change anything to say "a high profile tech company wants PR related to Bitcoin and to simultaneously test out what accepting it could do to their business". Every tech company is considering this - somebody probably brings up such a move to me every single day - and many are doing it. This is AWESOME and I'm excited to see Stripe and Square getting involved in BTC in less than a week (way more excited about Stripe btw) but for the larger value of BTC, it's NBD. Other factor: the price of BTC is still REALLY high (not that it couldn't 1000x) and assumes there's tremendous (billions of dollars) value in BTC long term. Square processes billions of dollars a year in value, but not on Market and it's not many billions and not much of that will go to BTC.
- battani 13y ago
  Agree with this. Merchants take on absolutely no risk by proposing bitcoin as a payment option because a) they never touch btc b) they still offer the CC alternative. There is no deterioration in customer experience. It's just an additional option that allows Square in this case to tap into a market of evangelistic early adopters who are ready to spend part of their coins. It's a smart marketing stunt (Square Market has been struggling to compete with more established marketplaces, so this could drive traffic to their service) but in no way points to the evolution of the bitcoin ecosystem. That will have to be measured on the consumer side of the market.

battani 13y ago

It's easy for merchants to accept bitcoin, because they always propose it alongside a CC payment alternative. And they never risk anything, because they only ever touch USD. So it's all gain for them. (This is more a marketing stunt to drive traffic to Square Market, more than anything else. Square Market has been having trouble competing with more common marketplaces such as Shopify and Amazon). This doesn't affect consumer adoption though, which is what investors/traders would be looking at. Also, if the number of bitcoin transactions through such methods goes up, BTC/USD is more likely to go down. Any bitcoin sent to a Square merchant will be picked up by Coinbase and sold at the bid price on the bitcoin markets, which will pressure price action down. (Coinbase then takes the USD from that sell and transfers them to Square).

gnopgnip 13y ago

It doesn't make it any easier to acquire bitcoins in the first place. When you already have a debit/credit card there is no reason to use bitcoins to shop with square.

plaguuuuuu 13y ago

A $10 t-shirt will still cost $10 worth of bitcoins. Whether that winds up being 1 or 1000 bitcoins is totally irrelevant. There's no intrinsic value

rpearl 13y ago
Your statement is useless, which is why it has been downvoted. It misses the essence of what currency is. Volatility makes bitcoin a poor store of value: you should not leave assets in bitcoin that you cannot afford to lose, because those assets may vary in actual value (meaning, might vary in what someone else is willing to pay for it) substantially over time: $10,000 of bitcoin today might be $5,000 tomorrow. Volatility makes bitcoin a poor medium of exchange: if I wish to sell something with bitcoin, I take on large risk that the value of my transaction might change. The t-shirt I sold for $10 today might yield me only $2 tomorrow. So, it is accurate to say that there is no intrinsic value to a bitcoin--but this statement is meaningless. $10 is also not an intrinsic value--currency is only relevant as a unit of account or a medium of exchange. Things only have value relative to each other. We use currency to assign a numeric value to each object.

thesimpsons1022 13y ago

the real answer is it is being overshadowed by the fact that one of the exchanges stopped allowing CNY withdrawals. I don't think any of the other answerers actually follow bitcoin.

davidblair 13y ago
Deposits have been restricted at this time, not withdrawals.

pmorici 13y ago

Wider acceptance takes time to affect the price, it's more of a long term rather than short term price driver. If anything, in the near term something like this puts selling pressure on BTC because the first people to give this a try are going to be people who already own Bitcoin and Square's merchants probably aren't holding any BTC sales proceeds.

Lerc 13y ago

It seems to be following a repeating pattern. * Bitcoin builds infrastructure. * People notice bitcoin isn't going away * Media says Bitcoin will make everyone Gazillionairres * Bitcoin skyrockets until infrastructure comes under strain. * Something involved with bitcoin breaks * Media(not neccisarrily the same media) says Bitcoin is all over, and everybody will lose their bitoin, their home, and their dog. * Price drops. * Bitcoin builds infrastructure. * People notice bitcoin isn't going away We seem be going into the build infrastructure phase. That's where genuine value actually gets added, and doesn't actually stop at the other times, It's just when the craziness is going on it's hard to see from the noise.

ycombasks 13y ago
> * Bitcoin skyrockets until infrastructure comes under strain. Source? Unless you consider the failure of Mt. Gox an "infrastructure" problem, then this is not the case.
- acchow 13y ago
  It's hard to see how that wasn't an "infrastructure" problem. Mt Gox was the largest BTC exchange - an integral bridge from old world to BTC world.
- Lerc 13y ago
  Not the failure of MtGox, but their day to day operations were significantly impacted during the peak hype. Other Exchanges had problems, I remember the "you can have bitcoin next friday, when we've got some ourselves" episode (bitinstant perhaps?). Even the most prepared business are going to have trouble when everyone decides to come knocking on your door in in the space of a fortnight. You can prepare for rapid scaling, but you can't hire and train people overnight.
contingencies 13y ago
You miss many elements with this summary, not the least of which is Bitcoin reaching a point of maturity with regards to regulation and compliance. To a large extent, that's happening next week in DC.

vladimirralev 13y ago

If anything the price should go down. When people buy things with bitcoins they are effectively selling bitcoins transitively driving the price down. If you want the price go up there have to be incentives to buy stuff with bitcoins such as lower prices. For many people it is cheaper to use bitcoins because they bought-in early, but that would be equivalent of cashing out their position and exposing their identity to the merchant, which most of the early adopters either don't want to do or would have done already when it was more favorable.

joshuak 13y ago
Well, unlike most currencies or commodities bitcoin can be traded at volume for currencies outside of a monitored environment. This means using bitcoins in a trisection does not effect the trading price, and people could trade in 'dark pools' or face to face for amounts significantly above or below the current 'market value' while having no effect on the market price at all. Even if it where tracked people buying things with bitcoin can just as easily drive the prices up as down. As with all transactions you must take into account the value of both sides of the transaction.

3pt14159 13y ago

Recently a large number of bitcoins were stolen from a major exchange. The hackers will be liquidating these over a long period of time, exerting downward pressure on the price.

johnpmayer 13y ago

Well, personally, I'm still paid in dollars. And dollars can already be used in all of these places.

tomasien 13y ago

It's not actually big news, is what I would say. Square is prominent to us because we know how it's growing, but it doesn't represent some insane amount of volume and this is only Square Market. It doesn't really change anything to say "a high profile tech company wants PR related to Bitcoin and to simultaneously test out what accepting it could do to their business". Every tech company is considering this - somebody probably brings up such a move to me every single day - and many are doing it. This is AWESOME and I'm excited to see Stripe and Square getting involved in BTC in less than a week (way more excited about Stripe btw) but for the larger value of BTC, it's NBD. Other factor: the price of BTC is still REALLY high (not that it couldn't 1000x) and assumes there's tremendous (billions of dollars) value in BTC long term. Square processes billions of dollars a year in value, but not on Market and it's not many billions and not much of that will go to BTC.

battani 13y ago
Agree with this. Merchants take on absolutely no risk by proposing bitcoin as a payment option because a) they never touch btc b) they still offer the CC alternative. There is no deterioration in customer experience. It's just an additional option that allows Square in this case to tap into a market of evangelistic early adopters who are ready to spend part of their coins. It's a smart marketing stunt (Square Market has been struggling to compete with more established marketplaces, so this could drive traffic to their service) but in no way points to the evolution of the bitcoin ecosystem. That will have to be measured on the consumer side of the market.