Bitcoins are officially donkdown

[Sanlmar]

Gonna give you one more chance. I really need to listen to Tine.

You didn't offer an example.

The "savvy fundamental stock trade....." That isn't how real people make money in the market. Soros & Buffet aren't real people.

Unless, you are infinitely bankrolled .... you can go broke being "right" and savvy. Never underestimate how long the market can be "wrong".

If you don't fully internalize this lesson you can end up busto.

But please offer a concrete example of daily use somewhere. The thread can use some lols.

[MumblesBadly]

Gonna give you one more chance. I really need to listen to Tine.

You didn't offer an example.

Let me repeat something I've said before: A stock trader who *only* uses technical indicators will not be as successful who uses a combination of technical and fundamental info. And by fundamental info, I mean any information that is publicly available beyond market trading data. For stocks, such fundamental info that has been show by academic research to be useful include:

- dividend amount and ex-day (because price history doesn't include adjustments for dividends),
- stock splits and reverse splits (good and bad news, respectively),
- when companies are expected to announce earnings or earnings guidances (a tech-only trader is more likely to trade against an informed trader around such information rich periods),
- how long after the fiscal period ends when a company announces earnings (long delays are bad news because mgmt is usually trying to figure out how to spin bad news),
- what day of week, as well as when during the day, unexpected news is released (late in the afternoon Friday is the preferred day for bad news, as mgmt prefers to have answer fewer questions/criticism in the face of bad news, and investors/traders are more likely to be distracted by the coming weekend),
- a positive earnings surprise by a stock that has been battered with a series of bad news over the past year (the previous string of prior bad news has likely excessively shaken the confidence of investors about the quality of such an announcement),
- for dividend-paying stocks, an unexpected cut in the on-going dividend.

But also let me be clear about something: I am not saying that someone could successfully trade ONLY on this information, meaning make a round-trip trade on it, because the research also shows that transactions costs would eat up most or all of the profits on such "fundamental" events. But if an investor was already planning to put on or take off a position on a particular stock, knowing about these fundamental events can influence when it is more profitable/less costly to make that transaction -- or even reconsidering making the trade altogether.

The "savvy fundamental stock trade....." That isn't how real people make money in the market. Soros & Buffet aren't real people.

Again, I did not mean to say that stock traders should *only* use fundamental info to trade, but NOT using publicly available info beyond market activity info is like purposely putting on a blindfold at a free throw line and told to shoot the ball into the basket, while another person is jumping on a small trampoline positioned between you and the basket, and allowed to wave their arms about at any time while doing so.

All this being said, if you doubt the usefulness of ALSO knowing fundamental/other-than-market info when trading stocks, check out this doc series on an interesting experiment a hedge fund manager did with amateurs using his own money. In this doc, you will hear the ex-trader managing this group of novices mention the significance of some of it to the group as they develop their stock trade ideas.

Unless, you are infinitely bankrolled .... you can go broke being "right" and savvy. Never underestimate how long the market can be "wrong".

If you don't fully internalize this lesson you can end up busto.

I completely agree. That is why I have said that Bitcoin could be priced well above $0 for a LONG time -- a decade even -- even if Druff and Sonatine are correct that it has no intrinsic value.

And this last point is what I mean by "driving yourselves crazy". And I really meant this comment mostly directed towards Druff even though I responded to your post and used the plural. Because Druff seems to take every blip downward in Bitcoin price as a potential sign of its impending doom. Sort of like how an anxious-to-be-there small child in the backseat of a car on a long family road trip keeps asking "Are we there yet? Are we there yet???" everytime the car pulls into a rest area/gas station so that someone can take a piss.

[sonatine]

one could do very well doing strong buys every time a news site throws shade at the chinese stock market.

[Starbucks Spunk Bucket]

Very interesting article surrounding recent bitcoin activity:

http://www.coindesk.com/black-friday-price-piece/

Cliffs:
Leveraged trading (loans) has let to an uptick in short-term trading activity
As usual very little commercial activity going on

"Besides leverage driving up volumes, some market observers also believe exchanges themselves have installed automated trading software to inflate the number of trades taking place on their platforms. This creates the illusion of a highly liquid marketplace, potentially attracting more customers.

Participants of Whale Club, a popular trading room on TeamSpeak, point the finger at exchanges for generating "fake" trades to pump up their volumes:

"It has become quite obvious to anyone watching the markets daily that some exchanges – I won't name them – appear to run 'bots' to ramp up their volume. I assume they believe they will attract more new customers if they appear higher in the table of exchange volume.""

[Sanlmar]

Very interesting article surrounding recent bitcoin activity:

http://www.coindesk.com/black-friday-price-piece/

Cliffs:
Leveraged trading (loans) has let to an uptick in short-term trading activity
As usual very little commercial activity going on

"Besides leverage driving up volumes, some market observers also believe exchanges themselves have installed automated trading software to inflate the number of trades taking place on their platforms. This creates the illusion of a highly liquid marketplace, potentially attracting more customers.

Participants of Whale Club, a popular trading room on TeamSpeak, point the finger at exchanges for generating "fake" trades to pump up their volumes:

"It has become quite obvious to anyone watching the markets daily that some exchanges – I won't name them – appear to run 'bots' to ramp up their volume. I assume they believe they will attract more new customers if they appear higher in the table of exchange volume.""

That the Chinese exchanges play a little dirty has long been accepted. I pointed out before that if you look at Bitcoinwisdom.com and look at the volume on or after 11/24 you see volumes that exceed the previous run up to $502. Suspicious especially since this does not jive with the non-Chinese volume during this period.

The stories are less apt to take the next step and make the claim that they will then take the other side of the trade. It's part of my short idea. I want to be on the same side as the cheaters.

Juicy game.

I feel like I missed my short entry by $3 or $4. I kinda now am not loving entry if the price hits $385-389 after this pullback. I wanted one more huge blowoff move into that area. Still watching.

Here's a quick except from a random story from last year about OKCoin & Huobi.
http://www.coindesk.com/coindesk-lau...n-price-index/

The problem of validating trading volume

In the past, there have been reports that Chinese exchanges have fabricated trading volume figures. These reports have included OKCoin, which is featured in the CoinDesk market share figures above.

The reason why an exchange might want to fabricate trading data is quite simple: the more volume an exchange appears to have, the more likely it is that liquidity-seeking traders will be attracted to that particular exchange.

What makes inflating volume data even more tempting is that, unlike bitcoin price data, there is no outside independent method available to easily verify exchange reported volume data.

It was for this reason that CoinDesk has been reluctant to launch a CNY index in the past.

Trading volume at BTC China and OKCoin

As the bitcoin exchange market matures, one can imagine a day when independent auditors will verify reported volume data, similar to how professional accounting firms certify the public financial statements for corporations.

In the meantime, the closest approximation we have to independent auditors are venture capital firms, which are investing in various bitcoin exchanges.

Recently, OKCoin reportedly received a major investment of $10m from several VC firms. Prior to this BTC China also received a $5m investment from a reputable firm (Lightspeed).

The closest approximation we have to independent audits are the venture capital firms investing funds in various bitcoin exchanges. We can reasonably expect that, given how important volume data is to the value of an exchange investment, that these venture firms audited both BTC China's and OKCoin’s internal volume records as part of their due diligence process.

There is another recent development which provides a greater degree of comfort with OKCoin's volume figures, which is BTC China’s announcement that it would be following OKCoin’s approach of charging zero commission on trading. CoinDesk views this shift in BTC China’s strategy as evidence that OKCoin’s zero commission approach is having a competitive impact on BTC China’s business.

For these reasons the CNY index will initially include BTC China and OKCoin.

What about Huobi?

There is another Chinese exchange which reports significant volume which is roughly on par with OKCoin, and that is Huobi.

Like OKCoin, there have been reports that Huobi has fabricated trading data. However, Huobi has not to our knowledge received a large investment from a reputable venture firm. Hence, for the time being we are not including Huobi in the new CNY index.

If we were to include Huobi in the earlier total market share calculation we can see how Huobi would substantially increase the total CNY share of trading from 70% to 81% (Charts 4 and 5).

[jacosta24]

Bitcoin is currently at $377.22

[Sanlmar]

I post the following chart as my plan for a long term short. It's Chinese but I am gonna short if we reach $385-389 (the sell line corresponds to US $389) . I should get a good rate on Bitfinix when the hope-a-trons are luvin life.

Lotta Fibonacci and Elliott Wave stuff but the big A,B,C,D is a connect the dots exercise. This is how I see the BTC price going down. The "sell" line corresponds to US $389 or so.



Just posting my bet.

I am also looking at scaling in some Nasdaq Q's short. There is a disconnect between Shanghai and US while all the traders are on holiday.

$350.

I don't even look at the U.S. exchanges anymore. Lol, I am thinking about Bitcoin in yuan(=$0.16). Move the decimal in the Chinese price and add half. Bitstamp & Bitfinix are just along for the ride. The Chinese trading is bigger than all the others combined.

My planned short entry was 2516-2585 & we hit 2489. Missed by 31-100 points. FML. I sound like Druff with his woulda shoulda NBA posts.

Those moot stains watching the same Fibs as the traders? I was sure it was gonna have one more big candle.

OKCoin smashing the kids leaning long.

What a carnival. Fundamentals. Eli's comin'.

[Sanlmar]

$372


The trade volume in China is huge and hard to explain. What has me puzzled is - who the fuck is taking the other side of the trades?

Someone buys and someone sells right into them. Everyday. Both sides are huge. Neither side was really winning or losing. Flat price considering the enormous volume.

Who is selling? Are the Chinese exchanges just expatriating yuan "in house"?

Yuan ---> Bitcoin Then Bitcoin ---> Euro What gets bought just gets sold almost immediately.

If this is what's going on how come the Chinese government hasn't put these guys in a prison camp?

Now the nerds are gonna think Bitcoin is legit. Guys like Mumble gonna think the Chinese are Christmas shopping with Bitcoin.

Short term you can't fight stupidity - Bitcoin just might have a little run here.

[Crowe Diddly]

are any of the other coins doing anything notable? litecoin, dogecoin, etc. bitcoin is obv useful to certain people, but wtf would someone ever do with any of the other coins? are criminals ever asking for their money in some other random cryptocurrency?

[sonatine]

are any of the other coins doing anything notable? litecoin, dogecoin, etc. bitcoin is obv useful to certain people, but wtf would someone ever do with any of the other coins? are criminals ever asking for their money in some other random cryptocurrency?

everything collapsed. occasionally people play the ltc market.

[MumblesBadly]

$372


The trade volume in China is huge and hard to explain. What has me puzzled is - who the fuck is taking the other side of the trades?

Someone buys and someone sells right into them. Everyday. Both sides are huge. Neither side was really winning or losing. Flat price considering the enormous volume.

Who is selling? Are the Chinese exchanges just expatriating yuan "in house"?

Yuan ---> Bitcoin Then Bitcoin ---> Euro What gets bought just gets sold almost immediately.

Probably easier to deposit Euros into Swiss bank accounts than another currency that trades in Bitcoin even though the Swiss have their own currency.

If this is what's going on how come the Chinese government hasn't put these guys in a prison camp?

You forget that local/regional government officials in China are usually the most corrupt folks. Witness how local officials have regularly allowed businesses to effectively steal land from peasants, and outrageously violate national environmental protections standards

Now the nerds are gonna think Bitcoin is legit. Guys like Mumble gonna think the Chinese are Christmas shopping with Bitcoin.

Actually, most Chinese are Buddhists. But putting that aside, I think the most signicant drivers of Chinese demand are (1) money laundering, (2) a store of wealth as an alternative to gold, and (3) pyramid schemes.

And the reason Bitcoin is likely to keep chugging along for awhile is because the Chinese economy is so huge relative to the current total value of Bitcoin, and the CCP isn't likely to loosen currency controls anytime soon, nor make a significant dent in local corruption given the structure of its political system, nor follow rules of law that protect property rights from government confiscation on a political whim.

Short term you can't fight stupidity - Bitcoin just might have a little run here.

Agreed. But I also think that you are underestimating the potential magnitude of money laundering as a valid economic reason for using Bitcoin, while having excessive confidence in the CCP to materially stamp out the corruption that likely drives it, as well as make credible promises to not confiscate wealth if someone falls afoul of the government for political reasons.

To better educate yourselves about likely underlying demand to move wealth out China to the West, as well as how corrupt its politics and economy has been, I highly recommend this YouTube channel:

[MumblesBadly]

And about China's corrupt local government:



And the pollution problem is making much of China's developed areas unlivable by Western pollution standards:



And many government officials are likely shaking in their boots about the current crackdown on past corruption:



And to put the level of the asset confiscation ($14.5b) of that *one* extended family of a high ranking Chinese official in perspective, the total market value of Bitcoin in circulation at the current price ($5.7b) is significantly less.



Are you now getting the picture of how likely demand for money laundering exists in China?

[BeerAndPoker]

Coin sitting at $393.62 atm on bitstamp.

Circle has it at $405 and I want to convert some money back so that sort of sucks.

[limitles]

Agreed. But I also think that you are underestimating the potential magnitude of money laundering as a valid economic reason for using Bitcoin, while having excessive confidence in the CCP to materially stamp out the corruption that likely drives it, as well as make credible promises to not confiscate wealth if someone falls afoul of the government for political reasons.

To better educate yourselves about likely underlying demand to move wealth out China to the West, as well as how corrupt its politics and economy has been, I highly recommend this YouTube channel:[/B]

For all the positives of our current financial system many negatives exist as well hidden in the fine print.

The people who kindly hold your savings and reward you with a yearly calender must be laughing to and from the bank. All monopolies fear what Bitcoins represents. The reduction of monies, that must be regarded as a given, will at the very least make some bankers miss their mid-day nap. No fees, no delays, no big brother, no official recording etc. Those who make their living outside the law will use whatever they can get but will also switch to plan B if necessary.

Taking even a small portion of the power brokers lunch money away is enough for some people to consider this new form of bartering. We hear about the occasional computer/Bitcoin robbery but compared to what banks have done forever, supplying easy money if your willing to mortgage the farm and then fulfilling on their promise, I'm happy to see an alternative such as Bitcoin. Should be quite a battle ahead.

[Sanlmar]

Alright Mumbles. I thought you were gonna ignore my challenge to give an example of real world Bitcoin utility.

Money Laundering.

I don't judge. I am just noodling this out.

Betting the Chinese government is corrupt and no risk is posed to those exchanges that are engaged is a negative EV play. It may be the case for now. I hadn't seriously considered this. But something this obvious will at the least just prove too embarrassing. Lose face. Dishonor. Ah-so.

I can't remember which one of you guys works for Goldman. But I have a career maker for someone.

We all know the banks are all hot on utilizing the blockchain for payments, international transfer, etc. Using fiat.
If they are about to go live, the boys on the trading desks gotta put on a huge Bitcoin short just before introduction. Whoever did this would be a legend.

Assuming the Chinese & the Russians don't lock it down first. That would be sad. Back to the mailroom.

I had a daydream that Goldman or someone else was taking the other side as a short. They would actually book this bet in some other way. No one would approve trade through the sleazy Chinese exchanges. But a cool thought.

Money laundering will just have to do for now. This current chapter will be revealed in time.

Fraud, theft, money laundering, illicit drug traffic, gambling/speculation - sprinkle some disenfranchised idealism and its impossible to turn the channel. I love the Bitcoin.

Wonder what Karpeles is doing tonight.

[limitles]

Money laundering yes, libertarism yes, a chance to sell it as the next big thing, oh yeah. People have become filthy rich off this intriguing option already. So many people wilth a few extra bucks are going to want to get their feet wet, others may jump all over it. You've got a commodity that we all can use, and you can pay for it with your watch. Vive la France

[MumblesBadly]

Alright Mumbles. I thought you were gonna ignore my challenge to give an example of real world Bitcoin utility.

Money Laundering.

Excuse me for not understanding that you were asking for what you mentioned here, because I had previously mentioned how money laundering was a primary factor for Bitcoin demand as a currency. But I didn't include supporting information.

I don't judge. I am just noodling this out.

Betting the Chinese government is corrupt and no risk is posed to those exchanges that are engaged is a negative EV play. It may be the case for now. I hadn't seriously considered this. But something this obvious will at the least just prove too embarrassing. Lose face. Dishonor. Ah-so.

I believe you are confusing Chinese culture regarding how to react to losing face and dishonor with Japanese culture. An example of the latter is how the leader of Japanese firm or government agency will resign and publicly apologize for poor performance as a means of saving the face of the company by publicly falling on his "sword". This is the modern version of a dishonored samarai or daimyo commiting ritualized suicide.



Instead, when thinking of Chines culture, think "imminently practical". That's why the Chinese Communist Party has unabashedly adopted capitalism that would make Mao shit blood, especially when the CCP continues to honor Mao as a great leader. Because it is imminently practical to give lip service to his memory in order to promote the legitimacy of the CCP as the sole ruling party of the China.

So "imminent practicality" trumps "honor" in Chinese culture. And being corrupt in a political system that has very weak support of the rule of law, and is instead dominated by person relations and opportunism, is imminently practical.

As for why I say that Chinese (in China) tend to think in terms of what is "imminently practical", this was a theme I learned a number of years ago when reading about comparative philosophies, and specifically why Chinese Buddhism is very different from the mystically-focused Indian variety. I don't have the source of where I first learned this, but the discussion in this page explains this, although not directly using "imminently practical". But it is implied by the focus of Chinese Buddhism on the rewards in everyday life versus the Indian focus on reward in the afterlife

http://www.shaolin.org.cn/templates/...ontentid=13502



Money laundering will just have to do for now. This current chapter will be revealed in time.

Fraud, theft, money laundering, illicit drug traffic, gambling/speculation - sprinkle some disenfranchised idealism and its impossible to turn the channel. I love the Bitcoin.

Exactly. And because Westerners like the posters to this forum have essentially no information on the demand for Bitcoin by the corrupt and gullible in China, none of us are likely to know in most cases with any material confidence whether Bitcoin price is bubbling, or driven by the expedient trading of the corrupt or concerned rich trying to get their wealth beyond the reach of the CCP, one should be *very* careful when trying to read the Bitcoin tea leaves for short opportunities.

[DRK Star]

http://www.bloomberg.com/news/articl...-bitcoin-theft


U.S. Agent Gets Six Years Prison for Silk Road Bitcoin Theft

[sonatine]

I wonder who else he fucked over during his career?

[Krypt]

probably some poor black kid that drk would blame