Bitcoin Tops $1,000 For the First Time 371
An anonymous reader writes with this bit from The Next Web "Bitcoin hit a new milestone today, passing the $1,000 mark for the first time. The virtual currency is currently trading above the four-digit figure, with its highest at $1,030 on Mt. Gox, one of the largest exchanges. Last week, Bitcoin's high for the day was $632. That means its trading value has surged 62.83 percent in a week, assuming we're looking at just its high points. That figure could of course rise even further if Bitcoin continues to push further up throughout the day."
Sell now. (Score:5, Insightful)
The price may go up a little more, but all indications are sell now before the crash.
Re:Sell now. (Score:5, Funny)
Re:Sell now. (Score:5, Insightful)
Tons of people said that when the price spiked from $4 to $20.
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Tons of people said that when the price spiked from $4 to $20.
The grandparent didn't specify, but I think he's talking about day trading. If you sell now at $1000 and buy back at $500 you'll have doubled the amount of Bitcoin that you own, assuming it falls down to $500 and assuming you have the nerve and patience to wait for it.
Re:Sell now. (Score:5, Insightful)
Better yet: stick to buying and selling. Leave derivatives to the professionals. Even they trip up on them, as the financial crisis shows, but they'll also get bailed out while you won't.
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You obviously suck at math, then.
If you have $2000 and can buy bitcoins at $1000:
1. Buy 2 bitcoins (spending $2000), short one, bitcoin drops to zero: you have $1000 (gain from the short)
2. Buy 1 bitcoin (only spending $1000), bitcoin drops to zero: you still have $1000 (saved from the start)
How on earth did you expect to make more money by shorting something while being long on the same thing, rather than directly selling what you have?
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Re:Sell now. (Score:4, Funny)
Selling bitcoin now isn't tempting fate so much as cutting off your nose to spite your face.
At a sudden $1000 per bitcoin, that's a really generous return on spite.
Re:Sell now. (Score:4, Insightful)
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Typically, people who make completely incorrect predictions are considered the fools.
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Many people fail to realize just how many fools there are.
I bought at $7. They are now worth $1000. Should I feel foolish?
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I bought at $7. They are now worth $1000. Should I feel foolish?
Yes. You should've bought when they were $0.01.
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Re:Sell now. (Score:4, Insightful)
I bought at $7. They are now worth $1000. Should I feel foolish?
No, you should fee lucky. Have you made any profit yet?
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It's not a scam, but it's not clear what it is.
The coins are behaving like a genuine new commodity with some amazing properties.
It's excellent for moving money between countries. It's stunningly good for microtransactions. It's very difficult to control companies which accept it. Those three properties alone give it a real value.
As a transactional currency, you could calculate a fundamental value as the volume of bitcoins in flux over a 45 minute interval. I.e., if I want to spend $10 on an e-book
Re:Sell now. (Score:5, Interesting)
Great! Lets do a 100 dollar bet: if the price at January 1st is lower than now I pay you $100, otherwise you pay me $100. You're in?
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Re:Sell now. (Score:5, Insightful)
The price may go up a little more, but all indications are sell now to kickstart the crash.
FTFY.
Most market crashes are triggered by large sell-offs; by imploring people to sell, sell, sell, you're doing your part to make the prophecy self-fulfilling.
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As long as you sell first...
Re:Sell now. (Score:4, Funny)
Hey, shut up, man, I'm trying to give myself an edge over these suckers!
Er, I mean... Ah... pay no attention to the man behind the curtain! Sell bad!
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And many run-ups are triggered by large buy orders from influential investors - that's how the market works. It's a zero sum game driven by a herd mentality in which everyone tries to guess when the herd will stop moving or start moving in the other direction. The market commonly fulfills it's own prophecies because the few influential people making the prophecies are always one step ahead of the herd.
Re:Sell now. (Score:5, Insightful)
Read up on “Short Selling” in the stock market.
What you do is borrow BitCoins from party A, exchanging your cash for their BitCcoins. Then sell those BitCoins for cash to party B. You now owe BitCoins and own cash. When BitCoins crash you buy back those BitCoins at a lower price to satisfy your loan to Party A.
There are people who claim that short selling can drive the price down. I don’t think you can. Or rather, a very large group can temporally drive the price down by short selling. But in the long run it balances out - as you said for every short seller there is a long buyer. So I don’t give the OP much credence. But then again I think he was trying to make a joke.
A word of warning - there is a old saying that the markets can stay rational longer then you can stay solvent.
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Borrowing shares is a thing because actual (naked) short selling of stocks is illegal. Is there some market where you can short bitcoin? It won't surprise me when bitcoin speculation markets spring up with none of the lessons learned and protections of real exchanges.
Re:Sell now. (Score:4, Informative)
One can as easily short currency as one can short stock. Or wheat, bonds, etc. I suggested looking up stocks because there is more and clearer information out there then on bonds. Let me see if I can make my point clearer. Remember, I am only going through the mechanics of a short sale.
Example #1: I sell 1 BitCoin for $1,000. This is your example. It assumes you have $1,000 and are interested in a finial sale.
Example #2: I borrow 1 BitCoin today from Party A and promise to pay back the 1 BitCoin plus interest sometime in the future. Party A does not trust me and asks for collateral so I post the $1,000 as collateral plus some extra amount as a buffer. I then sell the borrowed BitCoin for $1,000 to Party B. Under this scenario we don’t have to assume I have $1,000. Maybe I only have $5 or $10.
And I am not sure what technical point you are making. Yes, the number of shares sold in a IPO is arbitrary. So was the choice for the number of BitCoins.
As long as I can borrow BitCoins I can short BitCoins.
Re: Sell now. (Score:4, Interesting)
That's part of the problem. People are putting real value into the bitcoin market, value that the holders of old coins can come and claim whenever they feel like it. If any significant amount of old coins are cashed in, it's going to cause the mother of all crashes.
AFTER that happens, bitcoin might be a reasonably stable currency to do things with. It depends on whether the cashing in kills it or not.
If 10 people with 1000 bitcoins each now went to MtGoX and wanted to cash in their bitcoins, what would that do to MtGoX? I think they'd be fucked.
Seriously, this is empty speculation and there isn't the actual money invested in bitcoins to support this increase in face value. The system is fucked. Theres no way the bitcoins in circulation today could actually be cashed in for actual money.
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It costs me $0 to transfer dollars to relatives electronically, bank-to-bank. No fees at all.
Also, perhaps you are unaware, but Western Union has been losing business for two decades now. Many immigrants now send money home by opening a bank account and mailing a physical ATM card to their relatives, which can cost as little as $0 if the relatives withdrawal the cash in $ (which many can), and can be as little as 1% if a currency conversion is involved.
Even using a non-network ATM typically has a fixed ch
Re:Sell now. (Score:4, Insightful)
The entire history of investing.
Re:Sell now. (Score:5, Informative)
"In the entire history of investing, there has never been anything like X before."
This was said in earnest in every single past bubble. Bitcoin's future is entirely determined by fashion - as it becomes more fashionable, price will go up, if people drop it like last-years boy band, it can go to 0.
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In the entire history of investing, there has never been anything like bitcoin before.
That's *exactly* what they said about the tech bubble. Down to the very word. It was a "whole new economy"...and guess what?
Re:Sell now. (Score:4, Insightful)
What about the housing bubble? The value of land soared then fell – and they are not making any new land.
There are lots of bubbles that have formed where the assets are fixed. The South Sea Bubble where the number of shares was fixed. Limited edition pound puppies. The Nifty 50.
Or maybe the Hunt Brothers trying to corner the silver market. Could more silver be produced? Opening a new mine takes 10 years and would only add a very small fraction to the total supply of silver. Most mining of precious metals have almost zero effect on the overall supply. The last time a gold find had an impact on the price of gold was, IIRC, 1890 in South Africa.
I could go on.
No, it is a bubble when the price of a thing because disassociated with the intrinsic value of a thing and BitCoin has no intrinsic value. Of course, no money has any intrinsic value because it is the yardstick by which things are measured. You can only get relative measures, BitCoin vs. USD vs. Gold.
So I might point to Shiller’s checklist for bubbles. (He won the Nobel Prize for his work with bubbles.)
Check and Bingo - “New era” theories to justify unprecedented price increases
Check - Sharp increases in the price of an asset like real estate or dot-com shares
Check - Great public excitement about said increases
Check -An accompanying media frenzy
Check - Stories of people earning a lot of money, causing envy among people who aren’t
Check - Growing interest in the asset class among the general public
No Check - A decline in lending standards
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So what is V? For something like bitcoin, it is entirely plausible that it will end up being extremely fast (average stay of 1 hour in someone's hands). If that is true, the "market cap" of bitcoins will be on the order of less then a billion, which means that it is already overpriced.
Of course, neither one of us knows how big V is....
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My question is why would the black market settle on a currency in which all transactions are public record? At some point, after enough busts, the black market people will figure out that bitcoin is the opposite of anonymous. Its enough to make you wonder if it was invented by the NSA.
Of course this doesn't prevent its use as a speculative investment item in the mean time. Funny that something can have value because it is a high-risk investment and for no other reason.
Though it sounds like the curr
dammit... (Score:5, Funny)
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You're joking, right?
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Nope, around 2010 you could buy 1000 BTC for about $50, or $0.05 each. That's only a few years ago.
Re:dammit... (Score:5, Insightful)
Massive currency volatility makes long term business planning impossible.
Unless bitcoin settles down, it'll never become a viable mainstream alternative.
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Re:dammit... (Score:5, Informative)
Buy buy buy! (Score:2, Funny)
If central bankers are like rats... (Score:5, Funny)
... then Bitcoin is like rat poison.
Seriously, its your protection against money printing.
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I'll stick with gold. Thanks.
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No no.. thank *you*.... Save the bitcoins for me...
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Big ass hole (Score:3, Insightful)
Man, when this cash cow comes crashing to the ground its going to make a huge ass hole. Yes, it will come crashing down and I think it will be soon.
Bitcoins are a nice idea but people are not treating them like money. They are treating them like stocks and commodities. They are not commodities, they are coins and coins are supposed to be spent.
So when the fall does happen, and it will, then maybe we can start using them for what they are supposed to be used for. An not hording them like bunch of fucking dragons.
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What is your ulterior motive behind posts like this? These aren't the clueless idiot comments about bitcoin that show up on financial websites... these type of trolls are done for a reason. Are people like you actively shorting bitcoins (by some trick I don't know about) or do you have too much invested in the current system that has the U.S. and world by the balls?
Re:Big ass hole (Score:4, Insightful)
Sour grapes. He didn't get any when they were cheap and now he missed the boat.
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One simple trick to short Bitcoins:
1) Contractually agree to sell $amount Bitcoins on $date for $price near the current price.
2) When the going rate drops, actually buy $amount and hold them.
3) Wait until $date, then fulfill the contract, and sell them at the agreed $price.
You know, like shorting any other stock or commodity. The only difference is that without as large market as most stocks and commodities have, finding a schmuck to take the other side of the contract isn't so easy.
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For better or for use, people have been trading foreign currencies for ages.
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Man, when this cash cow comes crashing to the ground its going to make a huge ass hole. Yes, it will come crashing down and I think it will be soon.
Bitcoins are a nice idea but people are not treating them like money. They are treating them like stocks and commodities. They are not commodities, they are coins and coins are supposed to be spent.
So when the fall does happen, and it will, then maybe we can start using them for what they are supposed to be used for. An not hording them like bunch of fucking dragons.
If people treat Bitcoin like a commodity and do so with success then Bitcoin is a commodity and not a currency.
The deflationary nature of Bitcoin and the fact that transactions can't be reversed pretty much guarantees that it will never be used as a currency, but those two features could be strengths if you think of Bitcoin as virtual gold.
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That's what happens when your currency is inherently deflationary.
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So when the fall does happen, and it will, then maybe we can start using them for what they are supposed to be used for.
People already are. In fact, they are both a currency and an investment. I used them like a currency. When I wanted to buy something with BTC I converted my USD, bought it, and that was it. Value fluctuations don't affect those kinds of transactions as long as you don't sit on the BTC for several days after converting (although now I wish I had - I paid $140 for them). On the other hand, if you want to treat it like an investment then you can do that too.
If you want to use them as cash though, consider
Re:Big ass hole (Score:5, Insightful)
There is no ulterior motive or even sour grapes, just pure speculation at this point. Even most bitcoin "investers" believe that bitcoins are over priced. An they would be correct.
People are hording them like stocks hoping the value will keep going up and up. While bitcoins maybe be a virtual currency and not subject to the whims and regulations of any government they are still affected by the laws of economics, human greed, and insecurity.
The higher the value that bitcoins go the more people will start to get nervous about it and start wanting to sell. When this happens more people will sell and then the market will become over saturated with sellers and not enough buyers. Then the value will crash, free fall is a better word for it.
An since bitcoins are not regulated by any government there are no safety nets in place to stop a bitcoin freefall. I don't even know if it can be stopped because of the way they work.
I'm not just pulling these theories out of my ass ether. There is precedent for just such a collapse. The stock market collapse in the late '20 and early '30 that brought on the great depression. The things that caused it are currently all in place to cause a "great bitcoin depression."
Now I'm not saying that a bitcoin free fall will cause any kind of global economic collapse. Bitcoins are not that popular or even well known to cause that. In reality a bitcoin collapse will probably be barely noticed by most people.
Re:Big ass hole (Score:4, Insightful)
This is reminding me more and more of the tulip bulb bubble all the time.
Re:Big ass hole (Score:5, Insightful)
Money is a commodity. Money markets [wikipedia.org] and foreign exchange markets [wikipedia.org] prove that it is.
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That everything you've said concerning Bitcoin should be said of Dollars, too.
Not really. Dollars have one thing behind them that bitcoins do not. The force of law and government backing. People often over look these words on money.
this note is legal tender for all debts, public and private
Do you know what those words mean? It means if I have a debit and I offer you a US Dollar in the US you have to take it as payment. Bitcoins don't have that protection. That fact is one of the key things bitcoin people over look. The fact that the dollar is legal tender where bitcoi
Good to be a Winklevii (Score:2)
They have 1% of the supply per wikipedia in 4/2013.
A good speculation for them with their FB winnings I would say.
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Why do they call it a currency? (Score:4, Insightful)
This is just a hyper-volatile investment which can be bartered against goods from people who are either gamblers or clueless.
All currencies are volatile to some extent, but this thing has no fundamentals to back it up.
Re:Why do they call it a currency? (Score:5, Insightful)
same ol' shit every thread.
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At least on the bitcoin dupes, they get to change the numbers. /. these days, that's a lot of editing.
For
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I'm coming to the conclusion that there IS a fundamental basis for it: drugs, and other black-market items. They want an online currency, and there's a lot of demand for their product. Silk Road is shut down, but new ones will keep popping up. The demand is real, so even if you didn't have speculators there would be demand for the currency in which drugs are bought.
The one thing I don't quite get, though, is that Bitcoin is too traceable for a proper black-market currency. It's famously and explicitly pseud
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Lots of rehypothecation in the gold market, too ... how exactly is gold better?
What are they being used for? (Score:3)
Presumably, people want Bitcoins for some reason, otherwise the price wouldn't go up. I can think of 2 reasons that could be driving it...
1. Pure speculation in a rising market and wanting to make money by investing.
2. BTC actively being used for something so they have actual value.
I've seen some minor gambling sites. And a handful of sites that accept them for services/products. There was silk road, but that's gone. With the bust, I have to imagine that people are skittish about the new silk road, so I have to believe those volumes are way down. But all that just doesn't seem to be keeping up with the extreme increase in value. Make me really think #1 is the more likely scenario.
What am I missing? How are these being used?
Side note... I've got 0.34 BTC from when I played around with it a year ago. Wasn't worth cashing in then and forgot about them. Glad I didn't lose the keys.
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There are quite a number of sites to buy computer equipment and bitcoin miners themselves. There was also a good auction site called bitmit.com that recently shut down and was quite good.
Plus gyft.com allows gift cards to be bought via bitcoin which is a good way to directly buy goods from big retailers that don't accept them directly.
So there is more than porn available. I will agree basically with the gf post that there is still not enough accepting sites out there, but with the current worth of bitcoin
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Humble Bundles.
I put £20 into Bitcoin a few months ago. Bought a shed load of Humble Bundles for myself and friends. It's now worth £100.
That's not a bad thing at all, though it's not a mass market thing it proves that it can just be "used" like Paypal or any other type of money exchange.
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3. someone is doing this on purpose.
The volume of BTC traded is low enough that many investment firms could just that.
Where is all of this money coming from? (Score:4, Interesting)
Or it's an attack on the system itself, maybe someone figure out a way to race the market and make money?
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The other posters are correct though in that we need more places accepting BC. Namecheap is accepting BC, and if I make enough litecoins I will trade and apply it to my hosting bills.
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My current feeling is that bitcoin isn't the final form for cryptocoin. I think it will morph. The criticism that bitcoin hashing doesn't really DO anything is valid, but I think mining could lead to other cryptocoin systems where the cycles are put to good use. We've already got one that does prime number factoring. I could see a BOINC-like structure where the cycles are doing actual problem solving of some sort.
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Where is all of this money coming from?
China. In October, bitcoin got a lot of exposure in the mainstream Chinese press. BTC China rocketed past Mt. Gox to become the biggest exchange, and prices have gone up almost 1000% since.
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With the high profile shutdown of Silk Road the number of things you can buy with Bitcoin would be considerably less.
Negative. The silk road was a tiny fraction of bitcoin volume. Do you realize you can buy gift cards with bitcoin, via the Gyft website? For example, CVS sells beer, Gyft sells CVS gift cards, therefore I can buy beer with bitcoins. Problem solved.
Or it's an attack on the system itself, maybe someone figure out a way to race the market and make money?
My guess is it's massive amounts of Chineese money flowing into bitcoin, as they slowly realize that the USD will soon be worth less than the paper it's printed on (or the electrons in bank computers that actually make them).
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How about this for a revolutionary idea:
The price is going up because a lot of people are interested in it!
This price spike is a natural result of the mainstream coverage bitcoin enjoyed last week. It takes a few days for newbies to learn how to move money into bitcoin. Many of them have figured it out, thus today's spike (and crash).
Re:Where is all of this money coming from? (Score:5, Funny)
I do ATM
You might want to spell out the acronym in that context.
Anyone want tulips? (Score:5, Insightful)
.Seems like March 1637 all over again.
Wow! (Score:2)
I wish I'd bought some when they were $100. Maybe I will after the next crash.
Cryptolocker Spike? (Score:5, Insightful)
Reminds me of other inflated markets (Score:3)
based on valueless commodities: tulip bulbs and diamonds are the first ones that come to mind. Good luck to all holding bitcoins- you're going to need it.
Looks like deflation (Score:5, Interesting)
Not really over $1000. (Score:4, Informative)
Buy Price $968.80 Sell Price $963.76 (Coinbase).
Coinbase prices are real, because if you sell there, you get the money. Mt. Gox prices are higher, but you can't get US dollars out.
Re:Who wants to prick the bubble? (Score:4, Interesting)
I'm a bitcoin miner and I do agree they are overpriced at the moment. It should be $200-300 IMHO.
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Are you using a dedicated ASIC machine?
Re:Who wants to prick the bubble? (Score:5, Funny)
Re:Who wants to prick the bubble? (Score:5, Funny)
Re:Who wants to prick the bubble? (Score:4, Informative)
Yes.. ASIC blades mostly.
Really, the spike is good news because I'm making so much more money than usual (per USD), but this isn't going to last. It's not going to deflate to $0 though...
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SELL, SELL, SELL!!!
Take these rubes for all they are worth.
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I don't keep much BTC on hand, actually. I usually buy hardware directly with it. I did sell some yesterday when it was around $800.
Re:Who wants to prick the bubble? (Score:5, Insightful)
I recently had a discussion about whether or not the spike in BTC is a bubble or not and came to some interesting conclusions.
From what I can tell, essentially a bubble burst occurs when prices have become so inflated that people are priced out of buying in. This creates a lack of buyers, causing the sellers to dramatically drop their prices. For example, if I buy a house for $100,000, and then sell it for $150,000, then they sell it at $250,000, etc, etc. Eventually the price gets so high that people just won't buy the house. Leaving the last buyer to take the hit and sell at a loss (if he chooses to sell).
BTC is somewhat different though. It is divisible to 8 decimal places (infinitely divisible in theory, just need to update the clients). So people can never be "priced out" of the market, they can just buy a smaller slice of the pie if they desire. This is unlike a house where I (typically) can't buy just a fraction of it.
So the only thing I can say for sure, is that we cannot be sure whether or not the rapid rise in BTC value is a bubble which will burst or not.
Re:Who wants to prick the bubble? (Score:5, Interesting)
We might encounter other problems though such as traders making BTC unproductive for people using it for goods and services. It could also crash if some large (or simply enough) players cash out and deplete various exchange's ability to convert BTC into other currencies, which could cause exchanges to close shop and thus reduce the utility.
Though historically there are plenty of examples of bubbles of easily subdivided items, even including things like gold. So you can not get a housing-style bubble with BTC, but that does not make it immune from the general pattern.
Re:Who wants to prick the bubble? (Score:5, Insightful)
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Seriously, isn't it mainly being used to support criminal and terrorist activites? Aren't the rest of you, who aren't criminals and terrorists, just "Useful Idiots", unwittingly facilitating crime and terrorism?
You realize the same argument has been used by proponents of abolishing cash, right? Oh, and the anti-oil types, although in their case they're actually correct.
Sometimes being able to buy stuff without being fucking tracked is not only perfectly reasonable, it's a damn good idea.
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The USD is used for more criminal activity in a day than Bitcoin is for several years. The argument is tiresome.
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Re:November, 2013: (Score:4, Insightful)
Sometimes being able to buy stuff without being fucking tracked is not only perfectly reasonable, it's a damn good idea.
Like elections.
Re:November, 2013: (Score:4, Interesting)
Sometimes being able to buy stuff without being fucking tracked is not only perfectly reasonable, it's a damn good idea.
Like elections.
Except that several websites keep a running tally of who has donated to whom, and how much.
Sadly, the people buying elections have so much money and power that fear of discovery doesn't even cross their minds; hell, some of them are proud to be subverting the democratic process.