11 ms·

Bitcoin Falls Below $400

• StavrosK 13y ago
  Not only that, it was $100 higher yesterday. It was at $450, now it's at $350.
  • d55 13y ago
    time to buy right?
    • BorisMelnik 13y ago
      I have not been buying since I bought at ~300 probably a year or go now. I vowed I would not buy again until it neared 300 OR stabilized for 6+ months (which is hasn't). Might cash out my short term portfolio and dump it all in if it keeps going in this direction. I don't want to be kicking myself again!
    • pippy 13y ago
      Don't Catch A Falling Knife. It might stabilise now, but my hunch is it will stabilise around the $200 mark.
      • veb 13y ago
        What's the "hunch" based upon?
    • 7Figures2Commas 13y ago
      I pointed out[1] 10 days ago that the Bitcoin had broken through a key support level and anybody trading a similar stock chart on technicals would be looking to go short. From a purely technical perspective, there's no buy signal (yet). Catching a falling knife is always a bad idea but seeing them before they fall can be highly profitable. It's just a shame there's no readily available vehicle for playing BTC on the short side. [1] https://news.ycombinator.com/item?id=7500000 https://news.ycombinator.com/item?id=7500000
      • vidarh 13y ago
        > It's just a shame there's no readily available vehicle for playing BTC on the short side In the UK at least there are multiple firms letting you buy/sell BTC Contracts For Difference, including shorting with a 10% initial margin if you really feel like taking crazy risks. (Plus500 is an example)
    • arfliw 13y ago
      I think so, yes. But I'm averaging[1] and buying in small pieces, because I have no idea where the bottom will be. [1]http://en.wikipedia.org/wiki/Dollar_cost_averaging http://en.wikipedia.org/wiki/Dollar_cost_averaging
• beedogs 13y ago
  Gonna be a nice quick plunge down to the low $200s. I feel bad for anyone who bought a lot around $800 -- you'll be waiting months to recoup that investment.
  • mmcclure 13y ago
    Is this latent damage from the IRS ruling or something? I don't know why I'm still surprised by sudden, massive movement in BTC price, but usually the reasons seem pretty obvious (and over-reported).
    • Xdes 13y ago
      China is cracking down on exchanges by forcing the state-owned banks to close their accounts. That is the speculative force that is driving down the price. It is good that the price is going down since more people will buy Bitcoin now.
      • beedogs 13y ago
        Apparently this is all supposed to sort itself out by the 18th of this month -- that's the deadline they've given for account closures.
      • danielweber 13y ago
        "This is actually good news."
    • gojomo 13y ago
      China, and perhaps selling to pay 2013 capital-gains taxes.
    • thefreeman 13y ago
      Personally I think its more a reversal of the "hype" valuation of bitcoin. For a while it was in the mainstream media all the time. Also, probably more importantly, Mt. Gox was constantly pushing the prices higher because nobody could withdraw USD, so the only way to get out of Mt Gox was to use all your USD to buy bitcoins and then transfer them to another exchange.
• deleted 13y ago
  [deleted]
  • randywaterhouse 13y ago
    Sure. If one had conviction that it would rise. One could buy now and see it at 10 bucks by the end of the week. If one had that belief... One would not invest. If you have conviction BTC will be back then of course you'd get in now. But people thought getting in at 600 was a deal at one time... Look where we are. Those people aren't too pleased if they had conviction it was going to 1000 again. If volatility has taught us anything, it is to be wary. Volatility means up-swings and down-swings. Perhaps the past year was just an up-swing and we're doing some mean-reversion. It's foolish to make blanket statements.
  • at-fates-hands 13y ago
    >>> If bitcoin's volatility has taught us anything. Not sure if this has been touched on before, but is there manipulation going on with BTC? With traders who have a bigger stake making the price go up and down, or is this pretty natural for the cycle? I'm actually interested in this. If there's another thread on HN talking about this, feel free to point me in that direction.
    • dobbsbob 13y ago
      There certainly is opportunity for major traders to manipulate the price, and for exchange operators. Stage a denial of service attack against the biggest exchanges, or spread media FUD and watch the price temporarily tumble. Start buying and boost the price, sell and repeat. It's getting harder to manipulate now though with more decentralized trading, but a year ago you could blast just 2 exchanges offline and affect the price. Btcchina and MtGox, and since Gox left ports wide open this was easy to do. Exchange operators could also fix the price if they wanted. There's nothing that prevents them from making hundreds of fake accounts on their own exchanges and bidding the price up or down since they are unregulated. They could even be pgp emailing each other to coordinate this for all we know.
  • Houshalter 13y ago
    It hasn't existed long enough to confidently predict any trend (and the efficient market hypothesis suggests that's impossible even if it had.) It could drop to sub $200 and stay there forever for all anyone knows.
• jere 13y ago
  I'm still kicking myself for buying a bit at $17 after the $32 peak and selling as soon as it came back up to that again some months later. I feel like buying again.
  • danielweber 13y ago
    It sounds like the emotions every single stock trader has ever experienced.
    • deleted 13y ago
      [deleted]
  • omgitstom 13y ago
    It is impossible to time this the sale of any security at its actual peak. Just be happy you made money :)
• paul 13y ago
  Is anyone tracking how much money miners are pulling out of bitcoin on a daily basis? I assume they have to sell some fraction of their earnings in order to pay for hardware and power. This should create a constant downward pressure on the price, since there always has to be new money flowing into the system, but very few people "need" to buy bitcoin in the way that miners "need" to sell (most buying is for speculative purposes). This is almost the opposite of public companies, which rarely issue new shares, and have a constant buy pressure coming from 401k plans and other automatic investment vehicles.
  • Ologn 13y ago
    Not that different from how paper currencies like the US dollar work in terms of money supply though. Of course, Bitcoin is not issued by a QUANGO whose chair appointing government has 10 aircraft carriers, over 5000 nuclear missiles and so forth. Anyone can start up a Bitcoin like currency (Litecoin, Dogecoin etc.)
    • tsotha 13y ago
      People overestimate the monetary value of military hardware. The Russians had a pretty powerful military when the Ruble collapsed. When people lose faith in the dollar no amount of firepower will save it.
  • batiudrami 13y ago
    I believe that at this point the amount of bitcoin being mined is so small in comparison to the amount that is out there, that this should be a negligible effect.
    • negamax 13y ago
      Nopes. Bitcoin's yearly inflation is about 1 million BTC for this year and next few years. So to keep the current price stable, almost 350 million (as of this writing) of new money has to move in BTC.
      • 13y ago
• nlh 13y ago
  All of this talk, all of these comments, the charts in the TechCrunch article, etc. All of this is talking about Bitcoin the Speculative Investment. Bitcoin the Get-Rich-Quick Opportunity. Bitcoin the Penny Stock. Bitcoin the Internet Stock. Bitcoin the Tulip Bulb. Bitcoin the Currency doesn't have a chance of taking off until all of the above go away. When they do (if they do?), THEN we can have a real conversation about the future of money. Until then, however, this is going to be the same pattern we've seen over and over again for thousands of years. I hope for the sake of the folks that have invested $millions (VCs, etc.) that this time it's really different.
  • ewillbefull 13y ago
    The conversation you're talking about is always happening, on IRC channels and mailing lists where work is actually discussed and merit trumps speculation.
  • dobbsbob 13y ago
    Indeed, I've used Bitcoin since 2011 and never for speculating. I buy servers with it primarily and now use it to easily transfer money. Wait until the ETFs start trading, speculation into the stratosphere but at least it might eliminate crashes from incompetent exchange operators. For money transfer, I freq hire foreign employees for a variety of things like scouting large markets in Lagos to see what kinds of apps can be made for it, a survey on local Pakistani payment methods and currency exchange storefronts, translations in various countries ect. Paying by using existing remittance methods like western union and others had me flagged immediately and all my outgoing transactions were seized for "proof of income" and all sorts of other nonsense, even for small amounts like $150 transfer to Sri Lanka. It doesn't matter if I do this completely transparently, and operate through a business once you start moving money to the developing world and they aren't family members problems arise. I now send them bitcoins and direct them to whoever is cashing it out on localbitcoins.com. In every case, they made more money than what I sent them since supply of bitcoins in those countries is scarce so worth much more than the price I paid(1). Argentina localbitcoins is paying almost 2x what I buy them here for. (1)Of course I've also lucked out, there hasn't been a massive price drop between sending the coins and cashing them like there was the other day when it fell almost $200 Edit: Another bonus of bitcoin is 3rd party payment. I can pay somebody local here cash at a cafe a block away and they directly load the bitcoin address of my contractor, so I don't even pay micro transfer fees, or even need to handle coins myself. Usually it goes straight to their localbitcoin.com account and within 20mins they can sell the coins, reducing price fluctuation risk.
• Ologn 13y ago
  I think people who have amassed a quantity of these are going to learn a real lesson in the meaning of value. There's a reason precious metals like gold and silver have retained value for millennia, and schemes like this have not. The VCs who have peddled this garbage are going to look like a bunch of frauds and fools. Not that it will materially affect them. The Cassandras who have been warning about Bitcoin will continue to be ignored, the press will still beat a door to put a microphone in front of these snake oil peddlers. With the talk of a bubble - if there is any sign of a bubble, it is a bunch of useless hashes like Bitcoin becoming worth $5-12 billion. I suggest anyone who bought Bitcoins go read the Bitcoin FAQs of why Bitcoins are worth anything. It is complete nonsense. Moreover it is not falsifiable. It is basically "they are worth something because people think they are worth something". So even if Bitcoin crashes, that theory can still stand, since it can not be falsified. That stripe of value theorist can just say people stopped thinking Bitcoins were valuable, so their price fell. Wise people can take the rise and fall of Bitcoin and ask real questions about where the value of commodities come from. The answer of the Bitcoin theorists, which is not that far off from mainstream economists, is a far cry from what economists like Benjamin Franklin, David Ricardo, Adam Smith thought the value of commodities came from. I already mentioned how precious metals have retained value over millenia. Some Bitcoin advocates point to the dollar and say if the dollar retains value, why can't Bitcoin? This is a complex issue which would take too long to go into here. For one thing, the dollar does not retain its value - a dollar from today is worth much less than a dollar in 1978. Also, the conspiratorial gold bugs who say the dollar is about to collapse are probably overstating the immediacy of the problem - but that does not mean there is not a kernel of truth to their worries about paper currency. Just look at the history of currency from antiquity up until the Weimar Germany Mark to see why. No magic bullet has been found since then making the dollar bullet proof. Their worries may well be found to be correct, although probably are nothing to worry about for several decades.
  • Edmond 13y ago
    I penned a short blog post a year ago posing similar questions about the inherent value of a bitcoin: http://colabopad.blogspot.com/2013/04/bitcoins-agent-smith-problem.html http://colabopad.blogspot.com/2013/04/bitcoins-agent-smith-p... I think there is a future in virtual currency but it will have to be anchored to reality.
• baddox 13y ago
  Out of curiosity, is "price correction" ever used to describe an increase in the trading price of a currency or asset?
  • mynameishere 13y ago
    No, and for the same reason a plane takeoff is never called an upwards "crash". "Correction" is just a term for a smallish or slow-moving crash. It's just how the word is defined. When skeptical people reference increases, they'll call it pumping or manipulation or whatever.
  • ISL 13y ago
    Look up 'value investing'. There, you may find kindred spirits. http://en.wikipedia.org/wiki/Value_investing http://en.wikipedia.org/wiki/Value_investing
• anonbanker 13y ago
  Omfg. Time for me to buy buy buy. Market debasements almost guarantee 110% returns in short periods. Thanks for the tip, guys and gals.
  • anonbanker 13y ago
    And I sold today for $525. Thanks everyone. The downvotes were worth it.
• smtddr 13y ago
  Well, I've been ready[1] for this for awhile. It's all coming together nicely[2]. Now I wait for the magical event that sends bitcoin back to the moon at the EOY... or wipes me out. 1. https://news.ycombinator.com/item?id=7210538 https://news.ycombinator.com/item?id=7210538 2. https://www.youtube.com/watch?v=eYDkGJmSfy0 https://www.youtube.com/watch?v=eYDkGJmSfy0 __________ Disclaimer: Don't copy what I'm doing unless you understand the risks; I could very well lose all my money... in fact I probably will lose it all :-P
• acomjean 13y ago
  I think bitcoins price is going to be volatile. I think it needs to find a niche that drives a constant use or churn for it to remain stable. Too many investors not enough users? As someone who owns no bitcoins I find the whole thing fascinating to watch.
  • brazzy 13y ago
    > Too many investors not enough users? This, very much. Bitcoin was designed as a currency, not as an investment vehicle. Most use it as the latter, which causes problems.
    • jafaku 13y ago
      That's a myth. Satoshi compared it to gold multiple times. Imagine if gold was digital: You wouldn't be able to make it fit into a single category like "currency" or "investment". Or maybe you could, but you would have to leave behind this common modern assumption that a currency must have the exact same value every year, or even lose 2% every year.
• kzrdude 13y ago
  the MtGox crisis makes buyers much more cautious of who to trust. It's really hard to actually find a trading site you can trust.
• desireco42 13y ago
  This is what you get when you have Winklewosses invest in anything :), it has to crash
  • jafaku 13y ago
    It went up 2000% since they jumped in.
• sillysaurus3 13y ago
  There is one theory that no one here has mentioned yet: that Mt. Gox was responsible for Bitcoin's meteroic rise in price, and now that Mt. Gox has fallen, the price has been deflating. There is speculation that Mt. Gox had been fractional for at least 6 months, and that Karpeles tried to buy back his losses and wound up igniting the $100-to-$1200 spike. It's interesting that the price has fallen since then, and continues to fall. Either everyone is simultaneously becoming wary of Bitcoin, or there are other forces at work. The other possibility is that since coin is concentrated into the hands of a few, those few can tank the price if they feel like bailing out. Also, it's probably a good thing that the price has been correcting itself. It's still dangerous to its users, so until the fundamental problems are fixed, it probably shouldn't be priced too highly. I've written about why it's dangerous to its users here: https://news.ycombinator.com/item?id=7521906 https://news.ycombinator.com/item?id=7521906
  • jusben1369 13y ago
    I don't follow it closely like you but I'd look at the chart relative to the US IRS ruling. Prior to that BitCoin had a lot of potential as a currency and financial asset. That ruling really knee capped the currency potential and thus limited the upside.
    • jbooth 13y ago
      I really don't think speculators were thinking that far ahead -- herd mentality is a way more believable explanation, there are hundreds of examples going back to http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania
      • bunderbunder 13y ago
        As a group, speculators still need to have some underlying theory for why the vehicle they're speculating on is valuable. Almost by definition, a bubble popping is when speculators collectively recognize that theory didn't pan out. For BTC, probably the most likely theory is, "Bitcoin will become valuable as a currency." The world's biggest economies officially deciding that it is not a currency under their laws dealt a crippling blow to that theory.
• mrb 13y ago
  Falling, falling... everything is relative :) Bitcoin is still +150% up over the last 6 months ago. I expect Bitcoin to start raising again after April 15. Why? https://plus.google.com/100577178258662783679/posts/crrFWPrc665 https://plus.google.com/100577178258662783679/posts/crrFWPrc...
  • gress 13y ago
    Care to explain? Taxes apply to capital gains, which are only realized when you sell. Not to holdings. People who have large coin balances don't owe taxes unless they sell coins, and then the tax is a percentage of the sale.
    • modeless 13y ago
      The logic is that people who mined or sold bitcoin last year (and at the time didn't know how it would be taxed) now need to sell more bitcoin to get the cash to pay their taxes, and all that selling depresses the price. This is a plausible mechanism, but I think it's clear that news from China is having a much larger effect on the price right now.
    • mrb 13y ago
      False. Taxes also apply the moment coins are mined. See question Q-8 in the IRS notice.
      • gress 13y ago
        That's fair, but it only applies to miners, not speculators who bought their coins. Also - does this apply retroactively to coins mined years ago? I.e. Does satoshi now owe millions of dollars in taxes?
• DonGateley 13y ago
  I just hope this doesn't hurt the Vinklevoss twins. ;-)
  • josephagoss 13y ago
    When the announced they had amassed over 1% of all Bitcoins and they had been buying for months, you could calculate their average buy price. I did that and it worked out to be about $10 - $30 a coin. They won't be hurt for a long time.
• vijayboyapati 13y ago
  It's amazing to me how much price movements create news. Often people think the causality is the other way around; that there is some underlying news that must be responsible for price movements. Prognosticators in the stock market are forever looking for reasons for the price movements. Simply supply is greater than demand. In the greater scheme of things this fall is no more significant than the last falls when bitcoin dropped from $30ish to $2, or when it dropped from $267 to $50ish. The question still remains: will bitcoin become a standard for online payments and a medium of savings? If it will, it will be a bargain whether it's $10, $100 or even $1000, and all these price movements, and the kerfuffle they cause will seem amazingly quaint to those looking back on the past (our present).
  • Retric 13y ago
    Just because there is a slim chance bitcoin might end up being worth 2,000x what it is right now does not mean it's current price is meaningless. I would buy a lot of power ball lottery tickets for 1 cent but at 1$ a pop there a poor investment.
• pmorici 13y ago
  Doesn't seem to have deterred professional investors SecondMarkets Bitcoin trust just reported that they reached the 100k BTC milestone. https://twitter.com/barrysilbert/status/454391450353295360 https://twitter.com/barrysilbert/status/454391450353295360
• battani 13y ago
  Bitcoin price action has been suffering for the past few weeks. First the Mt Gox debacle, then China banning banks from processing it, then the IRS declaring it taxable as a property. The major impact of that last decision will be on consumer adoption. Now, every time I want to make a transaction, I need to keep track of my taxes. I know that some wallet services are already developing ways to keep track of this automatically, but that's just an extra headache for the average consumer. This in essence will force consumers to think of bitcoin more as an investment, rather than a "currency" they can spend, and that will impede adoption. I know nobody here likes to hear it, and I feel like a lot here in SV are tuning this out, but bitcoin is really, really struggling to find a relevant use case with consumers. Regular consumers have absolutely no reason to use bitcoin. The "1-click" payment and 1% price discount are not appealing enough to the average Joe who already gets 1-2% cash back, airline miles, and consumer protection on his credit card (and 1-click checkouts on many e-commerce platforms). And more regulation isn't helping the "crypto-anarchist" decentralization angle either. Add price volatility to that and it kills the consumer use case. But... how about micro-payments? Consumers have always hated them. http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht.. http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht.... (Shirky, 2000) But... how about international transactions? Hard to beat the fees at https://transferwise.com https://transferwise.com. Bitcoin is great, FOR MERCHANTS. BUT PAYMENTS IS A TWO-SIDED MARKET. A winning product must appeal to both sides, the buyer and the seller. Bitcoin appeals to the seller at the expense of the buyer. Consumer adoption is going to determine whether or not it succeeds on a grander scale. Unfortunately, Bitcoin does not solve a problem for consumers. Especially with tap-tap mobile payments around the corner. When it comes to money, consumers want to be insured and cuddled and protected and not run the risk (however small) of being criminally liable for transactions and have someone to speak with if they make an erroneous transaction or have their card stolen. And they can already do all that, which makes it tremendously difficult to compel them to change the habits they've had in forever to adopt a system that does not provide them with significant advantages. I've been in bitcoin since 2011 and used to be a big believer, but I don't see bitcoin gaining traction with consumers, in part because of the huge regulatory risk. Any significant threat to the banks' business will be met with harmful regulatory control (friendly reminder: Wall Street banks fund the largest political lobbies in Washington). It could be destined to eternally remain a store of value (like gold) or find very targeted applications (like specific types of machine-to-machine payments). The underlying blockchain technology could be of more use (if adopted by the banking system, for example) but that is still far in the future.
• jamesisaac 13y ago
  Any possibility this could be partly due to coins stolen in relation to the Heartbleed exploit being cashed out? Even if it's just a single individual who gained access to a large stash, dumping it via the exchanges could be playing a part. Perhaps their motive would be to cash out before anyone catches on and starts trying to trace their transactions/withdrawals.
• frade33 13y ago
  easy come and easy go. in my case however, they never came in the first place :/
• rufugee 13y ago
  If one wanted to make a bet on price alone, what's the most reliable and safe way to cash in/out of the market?
• laichzeit0 13y ago
  A lot of people calling "crash" and saying the bubble has burst. Yeah it's "crashed" back to double what it was a year ago at it's peak. People in the Bitcoin world have extremely short-term memories. Remember the April 2011 crash? Oh you don't, well then have a look at this chart: http://arstechnica.com/tech-policy/2011/10/bitcoin-implodes-down-more-than-90-percent-from-june-peak/ http://arstechnica.com/tech-policy/2011/10/bitcoin-implodes-... Here's an even better one: http://www.forbes.com/sites/timothylee/2013/04/11/an-illustrated-history-of-bitcoin-crashes/ http://www.forbes.com/sites/timothylee/2013/04/11/an-illustr... It has a few crashes up until April 2013. Get over it.
• muyuu 13y ago
  Aaaaand it's back up to ~$430