Bitcoin Drops Back Below $6,000 as 2018 Loss Approaches 60%

https://www.bloomberg.com/news/articles/2018-06-27/bitcoin-drops-back-below-6-000-as-2018-loss-approaches-60

by everdev • 8 years ago

61 72 8 years ago

bloomberg.com

panoply• 8 years ago

Just for a second give thought to those who purchased bitcoin when it was at 18k.

everdev2• 8 years ago

Past success unfortunately does not guarantee or even predict future success.

mkempe• 8 years ago

And then also think of those who purchased below $1.

weregiraffe• 8 years ago

Okay. The thought is "bloody morons".

coderdude• 8 years ago

That's cold blooded. I'm sure a lot of good people were financially devastated by that poor decision. A hopelessly bleak existence can do a lot to your capacity for rational thought. A few people I know asked me if I thought they should invest in Bitcoin at the time. I'm thankful my answer was consistently 'nope'!

finebalance• 8 years ago

There was this story on bitcoin, maybe on Ars, in which they interviewed a cleaning lady who'd put just about her entire life savings into the coin when it was near, what we now realize, its peak.

Since then, bitcoin's fallen precipitously and I've personally felt plenty of schadenfreude about it, but... as with nearly every financial scam, it is rarely those who deserve it who suffer the worst consequences.

biql• 8 years ago

Some just expanded their investment horizon and now wait 100k by the end of 2019.

dpc_pw• 8 years ago

Don't buy Bitcoin. It's going to crash: https://www.youtube.com/watch?v=XbZ8zDpX2Mg

Biba89• 8 years ago

I don't always buy bitcoin but when I buy it crashes

ninedays• 8 years ago

I bought BTC when it was 15$. I bought again at 17k and bought at 6k and really don't care what the price of btc is today tomorrow or next week. I understand how easy it can be to call someone an idiot in restrospect when everything is down, but you have to know too that some people don't really care where it is _now_ and is just interested in where it go few years from now.

It is like calling people idiot because they bought btc @ 1000$ and then it dropped @ 360$. I really don't think those who bought at 1k are idiots but that's just my opinion and it's OK if other people have different opinion than mine.

Warm vibes.

jjeaff• 8 years ago

You left out those that might say that buying Bitcoin at any price is idiotic.

Blackstone46• 8 years ago

How do you value BTC? What is a fair price? $1m? $2m? $5bn? $10tn?

Do you have a valuation methodology?

My biggest issue with BTC is that it's subject to how the market feels about it. There's no cash flow. When I buy USD, I can by 2yr treasuries yielding ~2.5%.

Blackstone46• 8 years ago

Ouch - I was downvoted when i felt like I made some reasonable arguments without attacking anyone. Why was I downvoted?

everdev2• 8 years ago

It's a faith based investment. With a treasury, you are still hoping that the government won't default, which is why some government's notes have higher rates than others. Same thing with municipal bonds.

The market determines the price of anything based on supply and demand (which includes a risk calculation).

slededit• 8 years ago

The value comes from the same place of gold, and to a slightly lesser extent fiat currency. When something is used as a medium of exchange the item itself gains value from this utility. Bitcoin has no intrinsic value, but it does derive value from how it is used write large. A bet on BTC is a bet its use will increase.

tcbawo• 8 years ago

When you play poker, luck will win you a hand but skill prevails in the long run. I have a feeling Bitcoin will end up similarly, where much of the value will eventually transfer from the initially lucky to the pros. It will be interesting what increasing concentration will have on its popularity.

jjkk01012• 8 years ago

I don't know what is your position both in life and financially but sounds like you don't really care because you can tolerate risk and losses?

tonyedgecombe2• 8 years ago

If I'm honest I'm a surprised it hasn't fallen further, the only practical use seems to be buying drugs and it's not ideal for that.

herbst• 8 years ago

This is a very one sided view on things. I regularly use BTC as alternative for international payments. It's cheaper, faster, more secure and honestly it feels nice to not pay into the hands of visa and master.

Namecheap and FastTech.com being 2 big examples, as well as 2 of 3 of the hosting companies I use accept it.

Not to mention that alternative chains like Eth very well have a practical real world use outside if monetary value.

Edit:// I also order pizza and Chinese with Bitcoin like once a week. Saved me plenty of fees compared to other prepayment methods.

azag0• 8 years ago

Visa and MC don’t get almost anything, most of the fee goes to your bank.

rsynnott5• 8 years ago

So, current average fee is about a dollar. Plus you have to pay probably at least 1% to buy it, and the vendor has to pay similar to sell it again, and accept significant exchange risk. I struggle to see how this works out cheaper than, say, paying namecheap with a credit card...

dublidu• 8 years ago

How are you saving on fees when you buy things with bitcoin? The seller pays credit card processing fees, and I don’t see them giving you a discount for paying bitcoin.

lumberjack• 8 years ago

In your very specific situation this might work. But problems that a lot of people would face: 1. unreliable local BTC exchanges that increase the risk substantially 2. local banks that will scrutinize or prohibit transfers to/from BTC exchanges 3. cheaper/faster/better options (e.g. SEPA) 4. in some countries it takes weeks to months to setup an account with a BTC exchange

On top of that, international payments are only a PITA because banks are lazy. Banks could easily make the process cheaper and faster if they were so inclined. If BTC ever gains ground in this market, it would not last for long.

ulfw• 8 years ago

With that much fluctuation I disagree that BTC would be cheaper. Especially as it keeps losing in value.

I'd rather pay $10 and know $9.80 goes to the company I am buying from (rest to VISA) than paying some random amount of Bitcoin for the $10 purchase which may be worth $11 or $9 or $20 on the day I purchase.

UncleMeat2• 8 years ago

I regularly use BTC as alternative for international payments.

But how many people do this? I've sent like one international transfer in my entire life. I'd wager that the median number of international transfers among the US population is zero. In addition, BTC as a means for international transfer is totally decoupled from its price. If 1 BTC is $1 or $1m it works just as well for temporarily buying some and transferring it. This use case wouldn't really drive the price upwards.

prepend2• 8 years ago

Where do you order pizza with bitcoin? The average transaction fee is like US$2 right now [0], so you must either order lots of pizza or not care how much you spend. My average pizza take out is like $20, so tacking on 10% in payment fees is really inferior to just using a credit card (3%) or using Venmo (0%).

Sir_Substance2• 8 years ago

I use it for buying stuff from aliexpress on the regular.

wcoenen• 8 years ago

As far as I can see, aliexpress does not accept bitcoin as a payment method.

http://activities.aliexpress.com/adcms/help-aliexpress-com/p...

ruskerdax• 8 years ago

This is objectively untrue. You either have no idea what you're talking about and don't use Bitcoin, or you're lying. I've used Bitcoin for years for all kinds of things. I can only surmise this isn't downvoted to oblivion because a lot of people who dislike Bitcoin (or its users) for ideological reasons use HN.

tonyedgecombe2• 8 years ago

or you're lying

There is no need for that, you can disagree without being impolite.

trakout• 8 years ago

5 years ago, maybe. You can buy flight tickets and tech hardware (Newegg) with bitcoin.

Blackstone46• 8 years ago

How do you value BTC? What is a fair price? $1m? $2m? $5bn? $10tn? Do you have a valuation methodology?

My biggest issue with BTC is that it's subject to how the market feels about it. There's no cash flow. When I buy USD, I can by 2yr treasuries yielding ~2.5%.

charlesdm2• 8 years ago

It's been said many times before, but as digital gold. Gold is worth about $8tn. That puts it at about an 80x multiple from where it is today. But let's be "conservative" and put a 20 to 40x estimate on it, from where it is.

It's obviously an assumption, not a sure thing. But the only thing that needs to happen is people sharing the belief that it is and/or can become digital gold, which is quite peculiar.

If large stable investors buy in (pension funds, endowments, etc) that will help massively to support price levels, after a period of value growth.

Blackstone46• 8 years ago

The same arguments I used above can also be applied to gold. Gold is intrinsically hard to value. So pricing BTC off gold feels tenuous to me.

Gold also has non-monetary use (i.e. jewellery) which I imagine is a substantial portion of demand.

5+ years ago, I used to be really into gold when I used to read Zerohedge. I feel like I'm hearing similar arguments for crypto currencies vs. fiat as back then when I read up on gold vs. fiat. People were fanatical about gold (me included) and weren't objective.

I owned shares in gold miners. I got burnt and lost a whole bunch of money. So personally I'm sticking to investments which produce cash flow.

As they say, "History doesn't repeat itself, but it does rhyme." I had better learn from my mistakes.

bjl• 8 years ago

Large, stable investors don't buy gold, so why would they buy BTC? Especially now that the blockchain hype is derided rather than celebrated on Wall Street.

mrfredward• 8 years ago

Fundamentals supporting gold: 1. It has industrial uses - this doesn't justify current prices, but it does provide support at low price points because there is a demand that will increase at lower price levels. 2. People are attracted to shiny objects, and people like status symbols, thus they are willing to pay a lot of money for shiny objects that their friends can't afford.

Fundamentals supporting cryptocurrencies: 1. Criminals need a way to do business online. Of course it works for normal people too, but with the transaction fees and inconveniences inherent in current systems, cryptocurrencies are most attractive for people who can't do business through traditional channels. 2. But Blockchain is the future...

You can see a lot of parallels here, but note the differences: 1. Industry may use more gold plating as prices fall, but falling bitcoin prices won't make criminals switch from cash to crypto, so the price cushion is weaker. 2. People have been attracted to shiny objects for all of human history, so this is likely a part of human nature. (Regular) people have been attracted to blockchain for like 10 months, so this is probably a fad. Additionally, while bitcoin may be scarce within its own ecosystem, cryptocurrencies are not scarce in a global sense...a new crapcoin is minted everday. Unless BTC is the one true coin (and it can't support the transaction load), there is no real scarcity here.

By the way, if the fundamentals I listed for gold sound a little shaky, it's because they are. A responsible financial adviser might tell you to put 80% of your money in stocks, but he'd never tell you to hold 80% in gold.

UncleMeat2• 8 years ago

Assuming that BTC replaces gold is insane.

One BTC is exactly as useful as one "MyBTC" as a store of value. You can fork infinitely. Can't do that with gold.

hackerman12345• 8 years ago

Does the cash flow in the trading/exchanges not count?

Blackstone46• 8 years ago

Cash flow in the sense that real estate gives you rent, bonds interest and stocks dividends.

lucidlive3• 8 years ago

So everyone thinks that cause Bitcoin is down from its high that it was a bad investment? The top has been reached and it's all downhill from here?

Nobody who invested 1+ years ago is down so save your judgements for the future.

sunir• 8 years ago

That’s bubble investing. Watching the face value only.

Is the face value of Bitcoin higher or lower than its economic utility value?

What is the economic utility of Bitcoin? I think that is the real underlying unresolved question that creates volatility. The market is unclear and so can’t set a price objectively.

prepend2• 8 years ago

It depends on your perspective. A lot of people bought in 3 or 6 months ago and aren’t happy. Of course people who did that weren’t used to speculating and so are unhappy now that they lost substantial sums.

It’s significant news, but not really changing any of the fundamentals that I see.

Bitcoin will become a useful currency when it is stable for long periods of time. It doesn’t matter if that consistency is at 6k or 20k or 10.

tapoxi• 8 years ago

I just don't understand what the purpose of Bitcoin is. Everyone seems to be treating it as an investment, but its use as a currency doesn't seem to have obvious advantages over cash. Its value fluctuates wildly, transaction processing takes forever, every purchase you make is public record, the price is easily manipulated, and it takes a ton of electricity to operate.

What's the end goal of Bitcoin? What makes it worth investing in?

rsynnott5• 8 years ago

Greater fool theory; "I'm buying this thing early, so that when it hits the mainstream a load of naive people will buy it and boost my value". That has probably largely passed now, though; I see train station ads to buy bitcoin all the time.

I'd be somewhat surprised if it ever goes back to its beginning-of-year heights.

CaptainZapp2• 8 years ago

I could be wrong and certainly was wrong before, but I believe that what we're seeing here is the biggest game of musical chairs, ever.

There will be a lot of hurt when the music stops, represented by not finding anymore "investors" to fuel the hype.

In other words: I think you're spot-on!

lucidlive3• 8 years ago

Bitcoin is a store of value. And it's among the fastest, cheapest ways to send money worldwide. As we all know, there is a limit to the number of Bitcoins thus people think the value will increase with demand.

I'm not a Bitcoin investor. But I do buy other alt coins. All the points you mentioned are valid but are constantly being improved upon.

nikolay• 8 years ago

Bitcoin is a pathetic way to boost Global Warming so that a bunch of Chinese miners can separate Westerners from their wealth!

Finnucane• 8 years ago

Markets for speculative assets and commodities are generally down, and the dollar is up. So what do you expect?

toss1• 8 years ago

The BTC chart since last year looks very much like a classic bubble / burst sequence. Build up, running up to a hyperbolic frenzy, then precipitous drop, followed by long decline of lower highs and lower lows. This seems to be only punctuated by significant buys just around psychologically important 'support levels', which correspond with the several credible articles I've read about Tether coin being used to manipulate the currency.

The chatter is always about the next 'support level', and it always gets broken. I'm expecting it to slide down well into three digits (<= USD$ 999) before any real recovery, if there is one. The real use cases are materializing much slower than expected as the scaling issues and transaction times increase.

Edit: (& BTW, I'm a generally enthusiastic supporter of the cryptocoin concepts, just noticing that it is apparently much harder to really get there than originally thought)

m-i-l• 8 years ago

There's fairly strong evidence that the rise from $6K to $18K was primarily the result of market manipulation [0], so in some senses it isn't a crash more like returning to normality. Although there is so much market manipulation going on it is hard to tell what normality is, e.g. the rise from $150 to $1K between Sep to Nov 2013 was due to the markus and willy bots [1]. That's one of the problems with a completely unregulated market where almost all the wealth has become concentrated in the hands of a few largely anonymous players.

[0] https://news.ycombinator.com/item?id=17302054

[1] http://uk.businessinsider.com/one-or-two-traders-may-have-ca...

Bitcoin Drops Back Below $6,000 as 2018 Loss Approaches 60%

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