Bitcoin drops 10USD in less than 4 hours

http://bitcoinity.org/markets?exchange=mtgox

by rommelvr • 13 years ago

31 49 13 years ago

bitcoinity.org

alexdevkar• 13 years ago

Bitcoin is going to be extremely volatile. I don't think that has a lot of significance for its long term viability.

jussij2• 13 years ago

The last thing you want in a trading currency is extreme volatility.

jcoby• 13 years ago

I watched this for three minutes and in that time its value went from 37 to nearly 40 and back to 37 again. Several times.

How in the world can you use a currency that changes value by almost 10% every 60 seconds?

mhartl• 13 years ago

There's a natural monopoly in a medium of savings used to defer consumption. Among competing currencies, the winner is the "bubble that doesn't pop". Until the monopoly is established, though, volatility is to be expected, as it would be with any bubble.

jussij2• 13 years ago

If you look at the 6 month chart it's fairly obvious there's something unsustainable going on.

quaz3l2• 13 years ago

More people are using it. Economics 101.

SODaniel11• 13 years ago

I prob wouldn't mix the term 'Economics 101' with a early adopter currency that has fluctuated between $0.001 and $50 in less than 5 years and between $5 and $50 in the last 10 months.

josephagoss• 13 years ago

Bitcoin can't stay cheap forever, either more people use it and it has to gain value (because its so small at the moment) or people stop using it and the value ends at 0.

Those are your two options. Grow until the Bitcoin economy is worth some 10 Billion at least, or it'll be evidently dead and close to 0.

Its much more unlikely Bitcoins will stay around $20 - $60 for the next 5 years. (Although still possible)

SODaniel11• 13 years ago

I have no idea what variables you are using, or how you are reasoning that bitcoins somehow are 'cheap' at a certain price.

Using the only scale we have available (history) $40+ per BTC is VASTLY overpriced considering the previous historical fair market value.

niggler• 13 years ago

At this stage who is buying BTC? Who is the marginal buyer?

xb95• 13 years ago

It is my impression that BTC are mostly used by people who either a) want to stock up for the future "just in case" or b) want to minimize their digital paper trail for online purchases.

Think of it as "cash" but for the online world. Some people pay cash for everything possible just to eliminate the paper trail. Not because they have anything to hide, but just to reduce their digital footprint. A noble goal, I think, and one that I'm glad to see is starting to become a realistic goal online.

hueyp• 13 years ago

speculators.

http://en.wikipedia.org/wiki/Tulip_mania

escaped_hn• 13 years ago

I don't understand bitcoin (any links for newbies?). Why can't they just make it equal to the US or a Euro but use the bitcoins for the actual transaction which would still grant you the anonymity you want and not have this bubble behavior?

craftkiller2• 13 years ago

The issue is the price is not set by anything. Someone could set up an exchange where they sell bitcoins at 1 US dollar but then everyone would buy all their bitcoins and sell them at other exchanges. Right now the only thing saying that bitcoins are worth $40 each is that someone is willing to pay $40 for them.

edit: link for video http://www.weusecoins.com/

vellum• 13 years ago

You can more detailed charts for the past few hours here:

http://bitcoin-analytics.com/

SODaniel11• 13 years ago

For a 'currency' that has gone up from $4 to $45+ in the last 10 months and the last 50% in a month, a 20% drop isn't really that unexpected.

akavi• 13 years ago

Yeup.

Volatile thing continues to be volatile hardly seems to be news.

SODaniel11• 13 years ago

It's interesting how 'Bitcoin falls $10!!' is news, while the fact that it's gone up 50%+ in less than a month, and over 1000% in 1 year somehow is not.

fosk• 13 years ago

Anyone knows a real time trading platform for doing some BTC/USD forex?

phyalow• 13 years ago

There isnt one!

SODaniel11• 13 years ago

My guess is that a LOT of the Bitcoin owners today are early adopters that own very little BTC as a novelty and/or with the idea that "Hey, who knows. Maybe my 4 BTC will be worth $1000s in a few years".

This makes for a super volatile market. Especially coupled with the new Mining ASIC rigs coming to market, small volume trading etc.

I would suspect that it will take a LONG time before we see if/how the 'currency' will actually stabilize.

One must remember, less than 5 years ago, BTC were selling for $0.001! Today it topped out at around $50.

tibbon• 13 years ago

that's pretty much what I'm doing. I bought 3 on the chance that they pop up at some point. I'm not fully convinced of their stability, and I'm not going to drop thousands into it until I feel better about it- just don't have the funds or risk appetite for that much outlay.

SODaniel11• 13 years ago

Yep. I am pretty much acting the same way. I have a few BTC that I got years ago and a small ASIC mining rig ordered just 'For teh lulz'.

jalanb• 13 years ago

Meanwhile: Bitcoin gains nearly 10US$ in less than an hour

BoyWizard2• 13 years ago

The thing is, it doesn't matter. As far as I know, nobody prices anything in Bitcoins, they price things in USD/AUD/<insert currency> and then convert that amount to Bitcoins for the transaction.

You might end up paying 1.00 BTC, or 0.6 BTC, but it still works out to the be same in USD/AUD/<currency> (numbers made up for example)

fletchowns• 13 years ago

Well it certainly matters for the people that are sitting on a bunch of bitcoins.

SODaniel11• 13 years ago

Though very hard swings in short time DOES hinder wide adoption as it can cause retailers to lose money while a transaction is 'en route'.

No one wants to use a currency that swings 20% in hours of trading. Hell, that's prob 4-5x the margin on a lot of computer hardware.

Maxious• 13 years ago

BitPay, for example, absorbs the risk. https://bitpay.com/bitcoin-payment-gateway-api

> The net amount that BitPay merchants receive is equal to the gross amount (USD) of the order submitted, minus our fee.

> It does not matter how many bitcoins we collect, how long it takes to collect them, what we can sell them for, or how long it takes to sell them.

(not affiliated, just said the same thing last time this came up on HN)

TillE• 13 years ago

I feel like I'm missing something, but I can't quite understand the advantage of Bitcoins in this kind of scenario.

Who's handling all the instant real money conversions, and why wouldn't they just transfer the real money between accounts directly rather than converting it?

BoyWizard2• 13 years ago

It's not that instant real-money transactions are happening, but if I owe you $5 USD, I can say "I'll pay you 0.1142BTC" and the value to you is the same (as others have said, as long as the exchange rate doesn't fluctuate too much)

apaprocki• 13 years ago

Just looking at Mt. Gox, the volume in each hour of the day is such a small representation of the overall amount of BTC out there, it seems perfectly reasonable you'd see such crazy swings. Most hours it seems there is <= 5,000 volume. If there is no real liquidity when buying or selling any instrument, the price will swing.

SODaniel11• 13 years ago

Prediction time: 1 BTC under $15 within 60 days and relatively stable around $6-$9 for the next 18 months.

SODaniel11• 13 years ago

Something else people seem to forget is: This is an unregulated electronic currency without a paper trail.

Can you say "A market that a group of people wanting to rig value would LOVE!"

Nothing (as far as I can tell) stopping a group of large BTC owners to completely run the price on BTC to their advantage. Wouldn't even take that much money to drive prices, and impossible (almost) to detect and do something about.

mikegioia2• 13 years ago

What do you mean no paper trail? I thought Bitcoin worked by having a master list of EVERY transaction and then hashing the most recent for each new transaction.

This is from the Bitcoin doc [1]:

We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

[1] http://bitcoin.org/bitcoin.pdf

SODaniel11• 13 years ago

Transaction records? Yes. Tied to a physical person? No. There is as far as I understand nothing hindering private trades among owners, making 'rigging' entirely possible (I may be wrong).

joejohnson• 13 years ago

This post is an hour old and the price is already back in the $42 range.

psychboo• 13 years ago

I'm actually in the process of putting together a report on Bitcoin for a university computer security course.

It looks like HN cares a lot about the topic, would anyone care to point me towards some informative sources?

I've done most of my research through the official wiki and articles regarding Mt. Gox and hardware development into ASIC

obstacle1• 13 years ago

Is there a market for bitcoin options?

tosseraccount• 13 years ago

I only trust currencies backed by a precious metal. USD is backed by plutonium.

pdelbarba• 13 years ago

If that's the case then bitcoin is backed by unobtainium.

jrockway• 13 years ago

Does anyone sell FX futures on BTC yet?

Bitcoin drops 10USD in less than 4 hours

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