Bitcoin is back: Price quietly jumps 80%

http://www.cnbc.com/id/101728070

by mathattack • 12 years ago

89 95 12 years ago

luxpir• 12 years ago

Noticed this jump over the last few days, randomly checking the price with DDG. It's never clear what's behind these things, but I'm sure there will be some explanation (when the jump has reversed, no doubt).

selectodude2• 12 years ago

The daily volume has tripled in the past 15 days. There must be something behind that.

mathattack5• 12 years ago

There are two competing theories...

1 - When there's not a lot of volume, you can't trust price movements because it doesn't represent a critical mass of opinions.

2 - When there's too much volume, you can't trust price movements because it's a mania or panic.

I'm not sure if #2 is true in this case. It'll be interesting to watch.

tomasz207• 12 years ago

DirectTV started accepting BTC as a form of payment recently. Not sure if that could be driving up the volume?

williamcotton2• 12 years ago

My company launched a Facebook Bitcoin wallet two weeks ago and we've been seeing a lot of organic viral growth. We've had a few people in the Bitcoin community say that they're sure that it must be our app and the press related to such consumer friendly Bitcoin applications.

Who knows, maybe it was us at QuickCoin? :D

https://wallet.quickcoin.co

skaevola• 12 years ago

Could be related to Apple's announcement regarding cryptocurrencies in apps.

kingmanaz• 12 years ago

See here: http://www.reddit.com/r/BitcoinMarkets/comments/279jad/daily...

The "Bubble Watch" graphs have been updated daily for several months in anticipation of a future bubble. Bitcoin's market price has spiked seven times since its inception, every 220 days on average, and the above graphs overlay the previous bubbles with the current performance to predict when a bubble might occur.

Such charts may be a self fulfilling prophecy, though it's interesting to see how well the past bubbles align with the current spike.

To get another view of the past bubbles, go to bitcoinwisdom.com, set "Settings -> Scale -> Logarithmic", and change the view to 3d.

ISL• 12 years ago

Some people have been expecting a ~May-June rise for months [1]. If you look at a log plot, and believe that the future has something to do with the past, this conclusion has some legs. News articles like this will tend to drive the hype again, repeating the cycle, perhaps with smaller amplitude.

If enough people believe it to be true, it will happen, at least temporarily.

[1] http://www.cryptocoinsnews.com/news/bitcoin-price-2014/2013/...

mathattack5• 12 years ago

This is interesting because:

1 - Many efficient market theorists say there is no information is past price movement.

2 - There's a well known January effect in the stock market that's acknowledged by those who believe in #1.

I look forward to following this. And yes - log plots are the best way to look for these patterns.

panarky5• 12 years ago

The efficient markets hypothesis has a hard time explaining behavior in real markets.

In theory, traders search for asset prices that are higher or lower than fair value and profit by arbitraging back to fair value.

But in real markets, rising prices encourage more buying, which drives prices even further from fair value. Falling prices encourage more selling, pushing prices lower still.

Markets don't price to what traders think is fair value. They price to what traders think other traders will think the price will be.[1]

  We have reached the third degree where we devote our intelligences to
  anticipating what average opinion expects the average opinion to be.

The very existence of persistent booms and busts debunks much of efficient markets theory, and consequently the illusion that free markets can regulate themselves.

[1] http://en.wikipedia.org/wiki/Keynesian_beauty_contest

pfortuny• 12 years ago

Well, there is "seasonality" and in something as volatile and as intangible as bitcoin, "seasonality" may mean quite a few different things.

So it is likely not caused by past price movements but by repetitive events.

fredophile2• 12 years ago

The January effect can be explained by the impact of taxes and various metrics used to gauge performance of money managers. Large cap and small cap stocks react differently to the January effect. There is a correlation between January and performance but no causation. If these other factors changed the January effect could disappear or move to another time of year.

NelsonMinar• 12 years ago

Perhaps one of the other major exchanges started supporting a massive fraud? c.f. https://news.ycombinator.com/item?id=7796748

rdmcfee• 12 years ago

This could just be a correlation but the BTC/USD price seems to be inversely correlated with MtGox news. Trending down when rehabilitation/takeover looks promising, trending up when Willy report comes out and the momentum of the takeover bids seems to stall.

joeyspn• 12 years ago

Bitcoin is also driven by market sentiment, and the current sentiment is quite positive after the much needed Gox purge and the latest news (DISH, UK Gov support, etc)

Btc has recovered before from serious crashes and I'm pretty sure next Christmas could smash the current ATH... It really feels like last September/October or March '13.

I wonder what the financial gurus with bitcoin-is-going-to-10-predictions [0] say about that if finally their predictions fail...

[0] http://www.businessinsider.com/williams-bitcoin-meltdown-10-...

gst8• 12 years ago

It will be interesting to see how this will work out in the long-term. Currently the cost of Bitcoin transaction is already at around $50 which makes Bitcoin transactions quite expensive. The only reason why this cost doesn't matter yet is because the inflationary factors (new coins, etc.) are smaller than the deflationary factors (more adoption, etc.).

I see Bitcoin as something like the 2nd-gen P2P file sharing systems (Gnutella, etc.) where a radical decentralization approach was taken to counter weaknesses of the earlier generation (P2P: Napster, Currency: E-Gold). In the P2P world we figured out that a small amount of centralization provides benefits and is acceptable (e.g., Bittorrent). I suspect that in the e-currency world we'll be going a similar route, where successors to Bitcoin will use Ripple-like concensus systems instead of proof-of-work [2]. This should not only allow to significantly reduce the cost per transaction, but might also allow to make the network more secure in practice (as the number of validators in a concensus approach will be much larger than the number of mining pools with signficant hashing power in the Bitcoin world).

[1] that's basically the cost of finding a new block divided by the number of transactions per block - see https://blockchain.info/en/charts/cost-per-transaction.

[2] Proof-of-stake is a nice theoretical approach but due to the complexity involved it will probably take some time until a solution is found that also works well in practice. Proof-of-stake as implemented in Peercoin is basically outdated, something like Slasher (http://blog.ethereum.org/2014/01/15/slasher-a-punitive-proof...) looks more like a viable solution.

EDIT: As there has been some confusion about the $50 transactions costs: I'm not talking about direct costs for the person who initiated the transaction, but about externalized costs that are paid by the whole network. See my responses below.

ok_craig2• 12 years ago

The cost of a bitcoin transaction is not $50, it's about $0.06. Often times, such as for large transactions or moving old coins, you don't need to include a fee at all.

gst8• 12 years ago

The direct cost per transaction (= the mining fees paid by the person who initiated the transaction) is $0.06. The externalized cost per transaction (= the block reward divided by the number of transactions) is $50.

sickpig• 12 years ago

50$ of transaction fee? At current price that means 0.075 btc per tx. I can assure you that you can mv btc from one address to another for a lot less. Even without paying any fee at all. It all depends on how "old" are the btc you're moving, the amount of btc , the number of addresses involved in the tx and if you're in a hurry or not.

For more info see:

https://en.bitcoin.it/wiki/Transaction_fees

A 0 fee tx

http://blockexplorer.com/block/000000000002e0d610f875f5aa4fb...

gst8• 12 years ago

See my response here: https://news.ycombinator.com/item?id=7846502

moe• 12 years ago

Currently the cost of Bitcoin transaction is already at around $50

That's a meaningless soundbite.

The figure you cite is a function of the current network difficulty/hash-rate, tx-rate and USD/BTC exchange rate. It's devoid of any meaning when looked at in isolation because it is by definition already factored into the exchange rate.

placeybordeaux• 12 years ago

That chart is labled as "A chart showing miners revenue divided by the number of transactions."

Revenue, not cost. The cost depends on the amount of energy expended multipled by the price of energy.

gst8• 12 years ago

It's a zero-sum game. Revenue = cost.

solomania9• 12 years ago

http://bitcoinmegaphone.com/14XMmrqXiUcpPHySzj4SXSPyxLPiVVgo...

dangero3• 12 years ago

I'm assuming you made bitcoinmegaphone.com?

This was very confusing for me and it took me about 5 minutes reading the site before I could understand what I was looking at. There's so much information on that page that is irrelevant to a person following that link. Perhaps I could see this being valuable if people used it like pastebin, but why do people have to pay so much to post something?

nlh• 12 years ago

I have to say, after the big piece appeared about price manipulation / fraud / whatever on MtGox, I have zero confidence that this is a genuine rise.

Caveat: I'm not an "active Bitcoiner", just a casual observer. And I can tell you that my view is now irreparably tainted.

The "normals" I interact with continue to not use Bitcoin for anything. It's even stopped coming up in casual conversation (likely because the tide of consumer news stories has slowed). From my perspective, the Bitcoin economy continues to be powered by people who have either mined or bought BTC and are just exploring new ways to spend their windfall (Overstock! 50 Cent's new Album! Dish Networks!)

There is still no incentive to get paid in BTC, no incentive to use BTC, and no incentive to hold BTC (as the recent spike shows, it's still incredibly volatile).

For now, I'm holding on my belief that the Blockchain is the real story here -- and we haven't yet discovered the killer app (which I _don't_ think is BTC).

jhart3333• 12 years ago

> There is still no incentive to get paid in BTC

How about no chargebacks? That seems to be a pretty big issue for anyone doing business on the internet.

valarauca1• 12 years ago

Collectively we (as a generation, let alone a culture) haven't reached a point where more shopping is done online then in person. Until we start to approach that point we don't start to a bigger push for online digital currencies form the general population.

sequoia• 12 years ago

Chargebacks, while inconvenient for vendors, provide utility to consumers, especially online when there can be a long delay between paying and getting to receive/examine the product.

cb18• 12 years ago

When people mention "no charge-backs" as an incentive to merchants to use bitcoin, they seem to not realize or gloss over the fact that for that benefit to be realized would require the merchant only transacting in bitcoin. It's not like they can say, charge-back scammers have to use bitcoin, everyone else, credit/debit is fine.

I can't imagine that there are many business where the cost/benefit of only accepting bitcoin to eliminate chargeback losses makes sense.

JohnTHaller2• 12 years ago

No chargebacks is an excellent reason for a consumer not to use Bitcoin.

maaku3• 12 years ago

There is still no incentive to get paid in BTC

I get paid by clients in bitcoin. It saves me significant wire transfer fees.

eli• 12 years ago

Seems cool, but a bit risky. A modest decline in value of a bitcoin would likely cost you much more than the wire fee, no?

sanswork3• 12 years ago

How much do you actually save when you include selling them on an exchange and getting cash into your bank account?

Spearchucker• 12 years ago

I've a similar attitude towards Bitcoin. To use it I'd need to understand it and why it's seemingly so easy to get taken by an exchange. Understanding that takes an investment of time. I've yet to see something more compelling (to me) than "no charge backs" to justify that investment of time.

kordless2• 12 years ago

You are questioning trust in the markets connected to the Bitcoin network. You make it clear that trust can't be regained by saying it's irreparably tainted for you.

I agree with the assertion there may be things plugged into the network which affect price in either a (unnatural?) negative or positive fashion. /r/bitcoinmarkets has been talking about China intentionally pushing the price down for months now by way of implementing marketing sentiment, China style. However, I believe there are far more positive connections being added to the network (as you mentioned in your comment) and these connections will bring added value and stability to the market by acting as dampener to value manipulation.

Overstock has real sales with BTC. Sure, they aren't much, but it's a good start for what is essentially the world's largest startup. The only reason we're not all circle jerking each other over Bitcoin like we would something like Instagram (photo sharing site sold for $1B? really?) is because of what cryptocurrencies in general represent for humanity: computed trust. Trust implemented by a thing that we all run and none of us can stop except maybe for the devs, which requires consensus. That's a POWERFUL and scary tool.

When something messes with trust, interest and fear, you get the AWE response from humans. This results in either great joy from trusting and being interested it, or anger from fearing it. This is why discussions around Bitcoin are so polarizing.

Killer apps bring trust in a widespread way. Killer apps for powerful tools aren't invented overnight. It takes conviction and hard work to figure out opportunities and it usually requires lots of experimentation. Resenting or judging based on the fact some will fail in a given time range is illogical. I do hear you when you say you think the blockchain is the real story. I agree, but in a much broader sense of any type of computed trust.

pauletienney3• 12 years ago

Please exit of my brain. You exactly transcripted my mind into your post ;)

The keyword is "computed trust". This is a freaking awesome huge - never seen - feature. I just hope the tech behind is solid enough.

6thSigma• 12 years ago

We're still very early in the bitcoin story. Every "chicken and the egg" market gains traction like this - the start is fueled by early adopters on one side (btc buyers and miners) while the other side slowly opens up to it (venders).

panarky5• 12 years ago

To be successful, cryptocurrencies don't need "normals" to adopt them, or Walmart to accept them, or for the exchange rate to double every six months.

It's perfectly OK if they remain a primarily black-market phenomenon, the currency of System D [1]. Use dollars at Walmart, euros at the train station, and Bitcoin for remittances, VPNs and burner phones.

As repressive regimes restrict personal freedom in the "legitimate" economy, and as the global 0.1% extract ever more wealth from working people, System D will become larger, more sophisticated and globally connected.

Cryptocurrencies enable human freedom and dignity through System D. They provide independence from those who would control you and from parasites who profit from your labor.

Spend your dollars on consumer trinkets and meaningless entertainment. Save your Bitcoin for what matters.

[1] http://www.forbes.com/sites/jonmatonis/2012/03/19/could-bitc...

chimeracoder• 12 years ago

the currency of System D

For those who, like me, thought of the init system and were very confused confused:

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. ... They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy.

Is this a common term in the Bitcoin world?

[0] https://en.wikipedia.org/wiki/Systemd

coryking• 12 years ago

Since it has such low liquidity, it is also manipulated to hell and back by various bots, exchanges, scammers, etc. There was an article floating around that showed most of the last price rise was beside of a bot operating on MtGox: http://willyreport.wordpress.com/2014/05/25/the-willy-report...

Nothing is stopping another exchange or malicious person from doing the same thing.

rockyleal• 12 years ago

The report you refer to, about the bot at MtGox, is itself speculative, interpretative, and proves nothing. Just a heads up, before you jump into your radical conclusions:

An Occam's Razor approach to understanding the data, is that the bot was performing legitimate buys for an institutional investor who would have made a deal offline, and directly, with MtGox. There is a perfectly plausible explanation to the bot that is not nefarious. So, please reconsider you "irreparable" decision, since its basis are far form solid.

There are many reasons to believe the rise is 'real', especially that the fundamentals are enormously more solid now than when it crossed $650 now than when it reached that price for the first time (in november).

Fundamentals, you say? I am afraid that there are more serious ways to learn about those than whether the "normals" you interact with are using it or talking about it just now. Your personal perspective might not necessarily provide the whole picture! I recommend you get your data from a site like http://www.bitcoinpulse.com/ check it, please, and tell me if you still stand by your arguments.

Also, 'volatility' is not argument enough to eliminate the reasons why people like to be paid in Bitcoin. I prefer Bitcoins over Dollars without hesitation, and I am very glad I have been paid in Bitcoin in the past. Other people just want to accept any kind of money their customers want to give them, and eliminate the volatility exposure by using Bitpay and the like.

rgbrgb• 12 years ago

I'm pretty excited that Apple seems to be loosening their terms around cryptocurrency apps. Maybe that helps explain the spike? I'm hoping for some neat p2p ios apps.

unclebucknasty4• 12 years ago

I have zero evidence to support this except, perhaps, Occam's Razor and Bitcoin history, but I believe this to be either fraud or manipulation. In fact, I believe the majority of Bitcoin's price, whether volatility or stability, is not the product of natural market forces.

How does an asset with virtually no underlying value remain so remarkably stable for long periods? Then, how does that same asset suddenly experience such sharp increases in value and volatility?

There are those with huge holdings who have an interest in stability for the sake of its adoption as a currency, and its long-term value. They can easily manipulate the market towards stability. And, as we saw with Mt Gox, unsecured and unregulated exchanges can also be a vehicle for market manipulation and outright fraud.

I know that opinion is unpopular with some, especially without hard evidence, but many also believed the increase before the Mt Gox fiasco was organic.

I am not a Bitcoin hater, and have dabbled myself for a decent return. I just think its past time to secure it properly and earnestly acknowledge its vulnerabilities. That vs. pretending that any of this makes sense from a traditional market perspective.

icebraining• 12 years ago

How does an asset with virtually no underlying value remain so remarkably stable for long periods? (...) There are those with huge holdings who have an interest in stability for the sake of its adoption as a currency, and its long-term value.

Long periods? Long-term? When has ever Bitcoin experienced this? Looking at the graphs, I don't think I can find a single month where Bitcoin remains even close to stable.

unclebucknasty4• 12 years ago

Looking at the graphs, I don't think I can find a single month where Bitcoin remains even close to stable.

Sure you can. And, even more so when you define stability relative to the degree of fluctuation during volatile periods.

justizin3• 12 years ago

"There are those with huge holdings who have an interest in stability for the sake of its adoption as a currency, and its long-term value. They can easily manipulate the market towards stability."

Why is this suspicious?

unclebucknasty4• 12 years ago

Why is this suspicious?

I didn't say that it was "suspicious". I said it was manipulation. It appears that you agree?

But, maybe you meant to ask why such manipulation is bad, unhealthy, or similar?

In any event, my comment was directed at the general pontificating about why the price is on the move, which always occurs during periods of volatility. That discussion takes place as if we are talking about, say, an asset that is traded in a free market. But, my point is that it is not a free market and that the price is instead dictated more by manipulation and fraud.

Havoc• 12 years ago

So who is fudging things this time round?

laichzeit02• 12 years ago

For those who have been using Bitcoin for years now it's completely fascinating that people still doubt a technology like this that's seen _so many_ ups and downs and yet it just refuses to die. It stubbornly refuses to fail despite everyone's best wishes that it inevitably should.

vibragiel• 12 years ago

See, continuous ups and downs may be seen as kind of a failure.

sanswork3• 12 years ago

It is possible it refuses to fail because a lot of people are heavily invested in it financially and monetarily and are still able to artificially prop it up. Support like that cannot last for ever.

anigbrowl• 12 years ago

The 419 scam has been running for over a century, but that doesn't make it a good model for wealth redistribution.

http://en.wikipedia.org/wiki/419_scams

laichzeit02• 12 years ago

I don't think it's meant as a model of wealth redistribution. I personally just like the fact that Bitcoin allows me to pay for things in a one-time sort of way. For example, paying for pornography would be brilliant. I don't want something as edgy as that linked to my physical address or credit card in any way.

rsynnott• 12 years ago

it's completely fascinating that people still doubt a technology like this that's seen _so many_ ups and downs and yet it just refuses to die

Sounds rather like Second Life. Linden dollars, the currency of the future!

lnanek2• 12 years ago

Kind of weird talking about some conference in Europe no one ever heard of when Apple just OK'ed virtual currencies...

Bitcoin is back: Price quietly jumps 80%

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