Here is the real answer.
https://media.giphy.com/media/JnwT7K2PYgBBm/giphy.gif
Gambling/speculation. Once in a while you'll go on a run, but at some point you're going to 7 out.
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Here is the real answer.
https://media.giphy.com/media/JnwT7K2PYgBBm/giphy.gif
Gambling/speculation. Once in a while you'll go on a run, but at some point you're going to 7 out.
Sonatine, why are Chinese investors doing as you mention that I've bolded using Bitcoin and not with fixed income securities like Western investors do? Because it is a familiar phenomena that western investors move money into bond instruments when they lose confidence in the stock market.Quote:
Originally Posted by sonatine
Quote:
Originally Posted by Starbucks Spunk Bucket
i dont think anyone can give you an 'authoritative' response but my opinion is that its related to chinese investors attempting to insulate assets against the imploding chinese stock market.
also i wouldnt really call it constant growth since we see regular crawls of 7-10% increase in prices followed by a staggering straight drop in value that takes place over the course of minutes. so although the prices do increment higher when viewed at a macro level, thats not the whole picture really and those weird ass 'hiccups' where 20% of value can vanish in the blink of an eye seem to indicate that there is a very straight forward pump and dump dynamic being exploited.
Sanlmar,
Have you seen this article? It's 9 days old and I didn't see it discussed here. Pls read and offer comments.
http://www.wsj.com/articles/bitcoin-...lly-1449460380
Quote:
Bitcoin Fund Linked to Currency’s Rally
Heavy trading in Bitcoin Investment Trust may have contributed to bitcoin price spike
By ROB CURRAN
Updated Dec. 6, 2015 10:53 p.m. ET
After months at $250, the price of the digital currency bitcoin took flight in early November, peaking above $450 before falling back to $360 more recently. There is some evidence that trading in a bitcoin-linked fund, Bitcoin Investment Trust (GBTC), may have played a role in the spike.
On Oct. 21, for the first time since the fund’s May launch on the over-the-counter marketplace OTCQX, the spread between the publicly traded shares of the fund and the price of bitcoin became almost negligible, with the fund closing at a 1.9% premium.
Volume exploded. On Nov. 3, more than 71,000 shares valued at about $3.5 million changed hands—20 times the average. The price of bitcoin, meanwhile, surged 53% between Oct. 21 and Nov. 4, and volume on many bitcoin exchanges took off.
Michael Sonnenshein, spokesman for Digital Currency Group, owner of the $44 million trust’s sponsor, Grayscale, says the narrowed spread likely attracted more investors to the fund.
When trading ETFs, arbitragers often try to profit from changes in the spread between the underlying assets and the fund’s publicly quoted price. To do so, they must take a position in the asset itself—in this case bitcoin. The increased activity on the OTCQX-traded fund may have triggered a wave of bitcoin buying, contributing to the price spike.
“The additional liquidity and easier access to investors is helping create a more fluid market for bitcoin,” says Wedbush Securities analyst Gil Luria.
Since early November, the spread between the fund’s publicly traded shares and the price of bitcoin has widened again, fund-trading volumes have fallen, and the bitcoin rally has abated.
Again, conjecture, but I believe its a) because the Chinese government keeps a very sharp eye on traditional tracked transactions like what you described, and b) because Chinese are gambly as fuck and constantly falling victim en masse to BTC ponzi scams.
Thank you for responding. And your comments above may have provided me a way to more clearly flesh out my concerns about assuming that Bitcoim price is predominantly due to bubbles and irrational investors.Quote:
Originally Posted by sonatine
A) What you mention in (a) actually considers two different concerns that Chinese investors can have: (1) how will the stock market perform versus other "traditionally tracked" assets, and (2) how confident are Chinese investors that the government won't confiscate their assets.
-- If the concern of those investors was that the stock market would fall, they can avoid that risk by selling stocks and parking the cash in a domestic bank account, then reinvest in the stock market after it plummets. This is classic market timing.
-- Alternately, if Chinese investors are concerned about the government confiscating *their personal* assets, they will convert *any* traditionally tracked financial assets they own -- stocks and bank deposits -- into Bitcoin regardless of whether they believe the stock market will rise or fall. If the Chinese government can't easily find that Bitcoin wealth, this amounts to money laundering if the Bitcoin is eventually converted into another currency overseas (what Sanlmar suggested is happening with CNY --> Bitcoin, followed by Bitcoin --> EUR)
So, Chinese investor concerns about the stock market aren't directly important in this case.
B) I agree with your (b) comment, regardless of whether this is a Chinese culture or developing nation characteristic, I agree that this characterization is likely valid for a significant proportion of the investors in China these days. And here is where concerns among Chinese investors about the stock market actually matters: Because such "gambly" investors perceive Bitcoin as a risky asset substitute for growth-only stocks.
Like a growth-only stock, an investment in Bitcoin can only directly return a future capital gain or loss. As the allure of their domestic stock market fades, "gambly" investors turn to Bitcoin *as if* it were a comparable alternative to a growth-only stocks, since Bitcoin do not directly pay dividends. And this aspect on Chinese investor Bitcoin activity is where investor sentiment can drive Bitcoin price to bubbly for any number reasons (e.g. general news hype or the impact of various financial frauds).
---- Now to summarize ---
Assuming these are the only major factors affecting Bitcoin trading in the Chinese market, we can characterize Bitcoin price at time t as the sum of its contintuent components as follows:
Bitcoin(t) = Laundering(t) + Gambly(t)
And here lies the rub: As Westerners sitting behind our computer screens AND not understanding a lick of Mandarin, NOR personally knowing any of the many wealthy Chinese who have concerns about their government confiscating their assets, we aren't likely to know if Launder(t) is large relative to Gambly(t) at any particular time.
And given how much wealth has been created in China over the past decade (it is now the largest economy in the world, but the wealth is highly concentrated), and how the Chinese government only weakly honors the rule of law, is it wise to assume that the overwhelming influence on Bitcoin price in China is due to their "gambly" (including gullible) nature?
Whatever your answer (if you've gotten this far), thank you again for responding politely.
BTC dick riders Overstock.com are going to issue blockchain backed public stock offerings.
You can try to make sense of it here:
http://www.wired.com/2015/12/sec-app...mbid=social_fb
Reminds me of OKCoin and fake trades.
Who hasn't seen shit like this at one time or another?
The roulette wheel has an optical sensor that detects the ball. Imagine that a bored dealer picks up the ball and puts it back down. Bink, the board lights the same number again. Do that several times and you have a crowd.
It's quite simple. Blockchain tech is a record-keeping system of transaction that is very fast relative to traditional methods of legally recording and storing information about financial instrument transactions, and can provide nearly instant transparency to outsiders.. Bitcoin just happens to be the first fungible asset to use blockchain tech.Quote:
Originally Posted by sonatine
For example, with a stock issue blockchain, outsiders would be able to read almost instantaneously when insiders change their interest in the firm. Also, the cost of legally recording financial instruments transactions is expected to be substantial less using blockchain than the traditonal method. Bitcoin itself could implode to be worth less than toilet paper, but blockchain tech applied to traditional financial instruments is now expected to revolutionize the "backroom" of the financial industry because of the cost and speed savings.
http://www.coindesk.com/nber-report-...rporate-power/
OH SNAP.
chug this shit bitcoin:
http://www.wired.com/2015/12/big-tec...mbid=social_fb
Tine, could you explain why the use of blockchain tech to issue and track ownership in traditional financial assets like stocks and bonds will affect the market price of Bitcoin?Quote:
Originally Posted by sonatine
Because entities will be able to use the technology without having to adopt the Bitcoin blockchain dumbass.Quote:
Originally Posted by MumblesBadlyTine, could you explain why the use of blockchain tech to issue and track ownership in traditional financial assets like stocks and bonds will affect the market price of Bitcoin?Quote:
Originally Posted by sonatine
Any viable alternative poses a huge threat.
What annoys me most is when I'm not signed in I actually have to see your posts. Perma-sign-in now on
The issue is whether they would qualify as a "viable alternative". Corporate securities issued using blockchain tech aren't meant to be an "alternatives" to Bitcoin. In fact, Bitcoin already has crypto-currency competitors, and its price hasn't yet plummeted to zero.Quote:
Originally Posted by Starbucks Spunk BucketBecause entities will be able to use the technology without having to adopt the Bitcoin blockchain dumbass.Quote:
Originally Posted by MumblesBadly
Any viable alternative poses a huge threat.
So, how will CORPORATE SECURITIES issued using blockchain tech pose a threat to Bitcoin?
---
Also, please join me in refraining from using pejorative language when discussing this topic going forward. I know that I have done so in this thread in the past, but it really doesn't add any material content to the discussion. Thank you in advance.
Bitcoins always had 2 things going for it. The hippie dream of free transactions and anonymity. The problem with the theory of free transactions was the volatility of the currency and unreliability of the exchanges. The value of anonymity was enough to cover the fact that the "free transactions" always cost more on average than any non-retarded fee tagged to most fiat currency transactions in relation to black market trades, but for mainstream markets anonymity just isn't that valuable.
The price of Btc is mostly black market utility, speculation that it might one day get it's shit together regarding free transactions and then the good old speculation based on speculation. With blockchains based on something non volatile and already embraced by somewhat reliable financial institutions, the hippie dream gets materialized and all the real world problems of Btc get solved, just not for Btc. After that no one will really care anymore if Btc eventually get their shit together and after that you're left with just the black market utility (it's still worth about 20$).
But do those financial institutions have the intention of issuing crypto-currencies to compete with Bitcoin? Because the stated use per the news story is to use the tech to issue stock, and in theory stock issued by companies only have legal maximum limits based on "authorized" shares, and a company board of directors can at any time authorize more shares.Quote:
Originally Posted by gimmick
Meaning, there is no theoretical limit to the number of shares of an equity issue. In contrast, the maximum supply of Bitcoin is limited by the code, and the creation of new Bitcoin is driven by mining, not votes by a board of directors. And because changing the Bitcoin protocol to change the maximum limit would devalue the existing Bitcoin, none of the holders of Bitcoin has an obvious vested interest in changing that limit.
Lastly, how do you arrive at ~$20 for the value of Bitcoin's black market utility? Could you provide a reference to studies to support that figure?
Speculation and market psychology is an emotional thing. While use of blockchain technology and Bitcoin are two different things the release of blockchain like fiat exchange will capture everyone's interest and spook speculators.
$20 is fair but we can't promise you it will hold.
Again, like Krypt, you lose yourself with fundamentals. Enjoy yourself with the idea of Bitcoin but price is another matter.
I just saw this 2013 article that, IMO, puts into focus what development would crush the appeal of Bitcoin: If the Chinese government could materially restrict access to Bitcoin exchanges. And based on this article, this isn't likely to happen until China manhandles Hong Kong to the point of shutting down their Bitcoin exchanges.
http://qz.com/154420/chinas-ban-on-b...anned-already/
And that would be a very controversial move by the CCP, because it has to be careful about not killing the golden goose of Hong Kong's symbol as an autonomous region with a LOT of freedom relative to the mainland that is treated lightly by the CCP. So the CCP needs to way the cost of that heavy handedness versus the benefit they perceive from materially stifling Yuan-to-Bitcoin conversion.
Yup, we've been through this. We just rehashed the two Bitcoin bombs.
Quote:
Originally Posted by MumblesBadly
I mean, I knew a long time ago that you shouldnt be taken seriously ever but just wow.
Why is $20 fair to nouveau wealthy Chinese who want to protect their new wealth from the risk of confiscation by the CCP controlled Chinese government?Quote:
Originally Posted by Sanlmar
And why is Bitcoin not tumbling with the news about these developments?