Holy crap! BTC (bitcoin) plummeted hard... wondering why?

Hey all. I had no idea where to post this, but Current Events seems about right (since there is no alt. currency forum I don't think)...
Anyway, I have no investment into BTC or any other crypto-currency, other than the tiny little bit I have from being a part of mining pools. I really only started following this whole thing about a week and a half ago, so this is probably just "business as usual" for the crypto currency world, but BTC has been sitting at well over 600 for (what, to me seems like) a long time. I went to bed, and woke up and checked btc-e and mtgox and both were at 425... great for me since I don't have any bitcoin to sell, but wondering what happens now.

Is the market truly this volatile? Can anyone explain to me this seemingly random nose-dive, or is that really just how the system works, random crashes...?

I am not an economist, not a day-trader, so all this is very new to me. For all I know this is just normal events and not random at all, perhaps they can be computer or something... It's crazy and opening up a whole new perspective on the entire economy to me.

To sum it up:

I cannot predict the future of this currency, but am wondering if there is a way to, in some sense, mathematically estimate what will happen next? If anybody could just tell me that and answer me satisfactorily I will be a very happy dude.

Cheers

reply to post by 3OGRE3


The main reason why the price has plummeted (this time)is because the Chinese have ruled that their banks can no longer use them for transactions.

I believe in the power of Bitcoin and I'm sure the price will fluctuate even more in 2014, but it's still definitely the way forward imo.

Additonally, just a random piece of info. Did you know JP Morgan have had around 200 patent applications (to create their own online currency) rejected?

The power is with Bitcoin

reply to post by 3OGRE3


A few months ago it seemed like it was around $100.

Then pow, a couple of weeks ago it reached about $1100!!

I've been very tempted to get into this as I am struggling to live on the money i have. I'm just nervous about trying to draw rather large sums of money back out of the system. It's just so confusing... Passports needed, phone bills etc. Then software, then some codes then... It's all a shamozzle. I'd rather barter a cow for some beans.

The value of the cryptocurrency has crashed to $550, less than half the $1,200 trading level last week, after BTC China - the world’s biggest bitcoin exchange - halted deposits in Chinese yuan.

RT

Its an attempt to stop money laundering. Governments around the world hate Bitcoin because of the anonymity.

They want names and faces for all purchases. Guns drugs ect are some of the most bought things with Bitcoin.

reply to post by shaneslaughta

They want names and faces for all purchases. Guns drugs ect are some of the most bought things with Bitcoin.

How can they know that if it's anonymous?

I sense more fear mongering here, it's amazing what TPTB will say and do when their know they're losing their grip slightly.

reply to post by Zcustosmorum


Well, it seems anonymous. But when I was looking into getting an account, they wanted licence, phone bill with my address or passport. I get nervous when a website wants that kind of thing to verify me.. If they know that much (mt gox), it sure as heck ain't anonymous anymore.

reply to post by Zcustosmorum


Its not fear mongering, its truth. Simply put, most of the money inserted into bitcoins go strait to the silk road. If you dont know that it is, google it. Its been discussed enough here.


I'm sure the US had something to do with it. Most of the drugs such as synthetic marijuana come from china in bulk form. Sold as research chemicals and so forth.

There is a high demand for such thing on the silk road. The US is trying to stop people from ordering them and bringing them into the country.

Qumulys

Well, it seems anonymous. But when I was looking into getting an account, they wanted licence, phone bill with my address or passport. I get nervous when a website wants that kind of thing to verify me.. If they know that much (mt gox), it sure as heck ain't anonymous anymore.

That's correct. The US has made them responsible, they have to keep a paper trail to cover their arses on their end of the transactions.

I personally have MtGox account. I have nothing to hide, as im not using my BTC for illegal activities.

The price is inching back up. I had heard rumours about these Chinese coinholders owning most of the BTC. I just attributed it to some group, or person spreading a rumour to incite people to get into a panic or frenzy and sell or buy from fear (or greed).

I think the best way to view BTC is as a blank slate.
"The love of money is the root of all kinds of evil."

If we, as a people, do not buy or sell based upon the love of money, and subsequently, the fear of losing it, and treat this currency with the respect that we would pay to gold, without loving it, without attaching ourselves to it, but just as a way to deal in transactions which benefit everybody... we could REALLY move forward. But... who knows, if BTC becomes corrupt just like fiat, then we have failed yet again.

I correctly predicted that the price Bitcoin would drop on the second week of December, see this post i made in a thread a few weeks ago and you will see i got the date exactly right

The reason it is dropping is because of 2 main factors,

1 - People cashing in for Christmas. This is a common thing that happens in the commodities market. When people cash in the price drops.

2 - because Bitcoin has sooo many haters and nay sayers constantly telling everyone its going to fail that what should just be a small drop in price causes a panic and everyone starts selling which drives the price lower.

So all things said and done its dropping because the majority of investors in bitcoin dont understand the market and are new to this kind of investment. It takes balls to hold fast and make money in this game. There a a couple of other factors involved here but they are minor and i dont want to give all my trading secrets away

My prediction is this .. its going to go back up again so dont panic. Dont panic sell because you will just be throwing away money. In fact if you want to make money start buying.

reply to post by PhoenixOD


I am so glad to have read your post. I have found absolutely NOTHING positive to hear about anyone on this huge drop. But, I have a feeling in my gut anyway, that this is really just a temporary thing. In any case, I do have a trading account... but it's pending verification... this makes me sad, it might take up to 10 days, and am basically just hoping the price stays this low for a while, until I can cash in on this.

But, I'm just doing it for fun, I don't really care if I lose money, all I know is, my money would be sitting in my bank account just waiting to get spent... might as well have it do something for me.

3OGRE3
The price is inching back up. I had heard rumours about these Chinese coinholders owning most of the BTC. I just attributed it to some group, or person spreading a rumour to incite people to get into a panic or frenzy and sell or buy from fear (or greed).

I think the best way to view BTC is as a blank slate.
"The love of money is the root of all kinds of evil."

If we, as a people, do not buy or sell based upon the love of money, and subsequently, the fear of losing it, and treat this currency with the respect that we would pay to gold, without loving it, without attaching ourselves to it, but just as a way to deal in transactions which benefit everybody... we could REALLY move forward. But... who knows, if BTC becomes corrupt just like fiat, then we have failed yet again.

BTC is a fiat currency....its made from nothing with no backing what so ever.
Its only value it from the people who use it. I.E buying BTC with USD, YEN what have you.

The money laundering part comes in when you have no paper trail to tie the transactions to persons.

BTC is a financial intermediary, that IMO was originally created as a way to do just that.

PhoenixOD


My prediction is this .. its going to go back up again so dont panic. Dont panic sell because you will just be throwing away money. In fact if you want to make money start buying.

edit on 18-12-2013 by PhoenixOD because: (no reason given)

Im not a financial adviser of any sort While you have the right idea (Buy low sell high). I dont recomend putting cash into the system.

If you want bitcoins mine them or hit up the faucets it may only be .000001 of a coin at a time....but its free.

If you start putting your cash into coins you may wind up with unwanted surveillance.

Just my two cents

reply to post by shaneslaughta


BTC is, from what I understand, to numbers (or encryption) what gold is to minerals. BTC can be considered a puzzle, which has only so many solutions. The puzzles are easy at first and become (logarithmically, I think, but am not sure) more difficult... so where the first bitcoins are relatively easy and do not take that much time or processing power to solve, the last bitcoins are insanely difficult and take lots of time and processing power (and therefore, electricity... in kW-hours ). The other crypto currencies are different puzzles with a different number of solutions... So, BTC is basically a limited supply currency which is made valuable on the condition that there are only a limited supply of them, just like gold. It is also made valuable by it's buying power, and I have a feeling to a much greater extent, it's selling power (for now, until it gets replaced OR replaces the current standard currency)....
Like I said, though, this is basically my half-baked opinion, I literally didn't know anything about bitcoin the week before last.

reply to post by shaneslaughta


I know you're right, and that really annoys me. And it's not even surveillance from the government I'm afraid of this time. It's literally the fact that any old computer savvy 10 year old can take all my funds unless I know how to protect myself.

And to be honest, although I try to keep up with technology, I'm not tech savvy like these 10 year old kids are.

reply to post by shaneslaughta

Its not fear mongering, its truth. Simply put, most of the money inserted into bitcoins go strait to the silk road. If you dont know that it is, google it. Its been discussed enough here.

Silk Road doesn't even exist anymore for a start, and when it was taken down by the feds the market didn't even feel it.

PhoenixOD makes two very goods points about Christmas spending and people panicking. And also the point made about China is also a very real driver of this downturn imo. And the other thing which we need to remember is that at the start of last month the price was below $250. This is just the market readjusting its self to a more natural price point.

a couple of common sense questions about BITCOIN....
1...why does it take much longer to redeem bitcoin back into real money, than to actually buy it?
2...why is assumed that the amount of bitcoin out there is limited to a set amount?
3...why is it assumed that the "person" that created it is honest and trustworthy?
4...why is it that on heavy volume "sell" days, there seems to be glitches in transactions?
5...why would any legitimate business deal in bitcoin, considering the tax and legality implications?

shaneslaughta
reply to post by Zcustosmorum

 

Its not fear mongering, its truth. Simply put, most of the money inserted into bitcoins go strait to the silk road. If you dont know that it is, google it. Its been discussed enough here.


I'm sure the US had something to do with it. Most of the drugs such as synthetic marijuana come from china in bulk form. Sold as research chemicals and so forth.

There is a high demand for such thing on the silk road. The US is trying to stop people from ordering them and bringing them into the country.

Silk Road was anonymous because it was on the Tor Network so everything was anonymous, it is not a direct link to Bitcoin.

Secondly, Silk Road no longer exists.

3OGRE3
reply to post by shaneslaughta

 

BTC is, from what I understand, to numbers (or encryption) what gold is to minerals. BTC can be considered a puzzle, which has only so many solutions. The puzzles are easy at first and become (logarithmically, I think, but am not sure) more difficult... so where the first bitcoins are relatively easy and do not take that much time or processing power to solve, the last bitcoins are insanely difficult and take lots of time and processing power (and therefore, electricity... in kW-hours

). The other crypto currencies are different puzzles with a different number of solutions... So, BTC is basically a limited supply currency which is made valuable on the condition that there are only a limited supply of them, just like gold. It is also made valuable by it's buying power, and I have a feeling to a much greater extent, it's selling power (for now, until it gets replaced OR replaces the current standard currency)....
Like I said, though, this is basically my half-baked opinion, I literally didn't know anything about bitcoin the week before last.

You got it.

BTC is an encryption algorithm where the next block of coins cant be minted without completion of the first. It requires tons of hashing power to create a block which may or may not contain coins.

Mining is only feasible in a pool, where everyone gets a share of the coins mines based on their computational efforts.

shaneslaughta

PhoenixOD


My prediction is this .. its going to go back up again so dont panic. Dont panic sell because you will just be throwing away money. In fact if you want to make money start buying.

edit on 18-12-2013 by PhoenixOD because: (no reason given)

If you want bitcoins mine them or hit up the faucets it may only be .000001 of a coin at a time....but its free.

Just my two cents

This is the really interesting part of BTC, I think. The fact that ANY BODY WITH A COMPUTER AND INTERNET can start mining crypto-currency at any time, basically... although those with craptops might be mining for a looooong time before they strike gold. That, and the fact that there are websites giving out BTC for practically nothing (clicks on the database, basically).... but you get so little, you'd have to be doing that 24/7 for 3 weeks before you make a single bitcoin. (which is nothing to laugh at, still, but I can make more than 400 dollars in 3 weeks...) Lots of wasted time and not much gained from all the work. Putting in just a little bit of money can reap quite a profit. And then of course, youtake that profit and put it back into the game... that way, if you do ever lose, you only ever lost that little bit you put in, in the beginning, and not your entire life goes to #, see? Think long-term, less work, little loss.