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Something about the above was sticking in the back of my mind....
Now I realize that it's a substantial deviation from the original doodlemagic suggestion that everyone should buy and hold bitcoins.
The comment about volatility and making money off of that volatility - that's day-trader-speak.
And it would sure be beneficial for day-traders if the value of bitcoin was buoyed by people buying and holding - less chance of a bubble bursting, at least in the short term.
Everyone has a different strategy or reason for getting into it. My business partner isn't a believer in it long term so he gets in and out.
I'm a long term guy however I've against my better judgement deviated from my strategy because of being greedy and wanting to play the volatility. It's worked out for me a few times, on another occasion I left over 30k on the table not getting out and back in at the right time.
The market goes crazy anytime China announces news. This one was a bit different than the past times but literally like clockwork china puts out a rumor, Bitcoin loses 30% and 2 days later things are back to normal.
What most people especially the ones following financial news media in US don't understand is that bankers and large institutions related to equity trading are the ones who control financial news in US. Jamie Dimon called out bitcoin as fraud but week or so earlier he told his investors that looks like his banks Q3 revenue from equity trading was down 20%. So how come when market is all time high, there is not any new money invested in stock market? Hmm....Also, if you speak to any honest investment banker, they will tell you how many calls they are getting everyday from their existing customers inquiring about crypto investing and how these people don't have an answer for them because they don't want to risk loosing their license. So all they do is spread fear and uncertainty but all that works for Old money. Any new investor is going to do research and not going to follow what these guys want you to believe.
The answer is simple, since equity markets are over extended, there is a revolution going on in coincurrency. There is already a coin war going on between China, Russia and the rest of the world. Anyone who says that one should get rid of bitcoins because North Korea is taking advantage of it is naive because China wants bitcoin to collapse because of the threat to Yuan and their parallel agenda of promoting their own coin like bitcoin cash or NEO. If the chinese really wanted to assist rest of the world they would influence North Korea in ways that would really matter. But they on the other hand want to protect themselves and any thing that helps them advance the Yuan manipulation. Bitcoin was giving them a run for their money so they wanted to shut it down. So anyone who wants to shut down bitcoin is actually promoting Chinese agenda at the moment because obviously other than China no other major country is currently behind banning bitcoin.
And thats the beauty of decentralized currency that China being a major player can not impact it no matter how hard they try. Bitcoin looses its valuation during Asian trading hours and when US or western markets are live, people start buying bitcoins hence driving its price up.
Finally, I think that once US bans bitcoin thats when I will think its done. I certainly will not get rid of bitcoins or its trading when China wants me to get rid of it
At the risk of sounding like a conspiracy theorist I will say it felt like a War on Bitcoin last week. News media which had previously been touting Bitcoin, talking about how it's going to outperform the stock market through the end of 2017 are now writing all these "is Bitcoin dead" articles.
At the risk of sounding like a conspiracy theorist I will say it felt like a War on Bitcoin last week. News media which had previously been touting Bitcoin, talking about how it's going to outperform the stock market through the end of 2017 are now writing all these "is Bitcoin dead" articles.
I think its healthy to go through theses phases of pull backs every now and then. It not only assists the institutional buyers but small timers like us.. But kind of shows how easy it is to shake things up in crypto world and take advantage of volatility.
What determines the value of a bitcoin? I believe it is just demand, as in, I want this enough that I am willing to pay a bunch of money for it. It has no intrinsic value as you cannot take it to a store and buy a loaf of bread with it. It only has fetish value, like art. So basically a bitcoin investor is speculating, hoping that someone will come along in a couple of years and offer a whole lot more for that coin than he/she originally paid for it.
That differs significantly from currency trading. The relative value of real currencies is determined by economic factors of the currency's country - GDP growth, debt, and balance of trade mostly. People who trade currencies are actually making a bet on the home country. People trading bitcoins are betting on the lottery. If that is your thing, go for it. I personally like to invest in things which have a more sound economic basis to their value.
What determines the value of a bitcoin? I believe it is just demand, as in, I want this enough that I am willing to pay a bunch of money for it. It has no intrinsic value as you cannot take it to a store and buy a loaf of bread with it. It only has fetish value, like art. So basically a bitcoin investor is speculating, hoping that someone will come along in a couple of years and offer a whole lot more for that coin than he/she originally paid for it.
That differs significantly from currency trading. The relative value of real currencies is determined by economic factors of the currency's country - GDP growth, debt, and balance of trade mostly. People who trade currencies are actually making a bet on the home country. People trading bitcoins are betting on the lottery. If that is your thing, go for it. I personally like to invest in things which have a more sound economic basis to their value.
Since there is no gold standard the value of currency is really the value that people place in it. I will agree that the US Dollar and even gold and silver have a much longer history of showing they can hold value and just a longer history of people relying on them and believing in them.
As far as value, Bitcoin is air, i'll give you that but the value is in how it transforms the world of money as we know it. You and I can buy and sell between each other without needing Visa or Mastercard or a bank or Paypal. I can send money to family overseas without needing to go to a Western Union and pay 2% or more.
I think it's less appealing to people in the USA and Canada and Austrlia who have no shortage of banking options ie Paypal, Venmo, ACH, credit cards, debit cards, free checking accounts, etc. That said only 6% of the world has reliable banking so it has much more utility outside of the USA. I'll give you a personal story I have a supplier in Africa who I can't pay with any other method than WU and tehy recently cut me off unless I provide a SSN and a bunch of other info and WU is not a secure company or system so I'm unwilling to proivde that.
So regardless of how you feel about Bitcoin I don't think there's any denying Blockchains are the future of how real estate, banking, and investing will be conducted. BItcoin is run on blockchain so while the currency is seperate from the technology I do believe Bitcoin has a bright future.
Doodlemagic,
I didn't want to start a new thread but I just read the Amazon might accept bitcoins next month. What do you think of this?
If they do, prices will definitely surge.
I think this is a rumor, I don't think there's a lot of truth to it. As far as what it means? Sure it will be a big deal in the media and diehard crypto people will love it and tout how big it is but I don't see it having a huge affect.
Sure Amazon has a lot of buyers and Bitcoin will be in a lot of peoples faces and maybe brought to their attention but Bitcoin at most saves Amazon 3% in processing fees, probably more like 1.5% since they are a larger merchant. If Amazon offers someone a 1.5% or even 3% discount for paying in Bitcoin that's not enough to sway someone, especially considering a new adopter is going to pay a percent or a few to buy Bitcoin in the first place.
I don't doubt bitcoin will go up if amazon supports and accepts it however who is going to actually spend their bitcoins for amazon stuff?
I'm not super knowledgeable about this but one odd thing is there's kind of an Amazon Gift card market that runs alongside the Bitcoin market. People use Amazon gift cards to buy bitcoin and vice versa, especially people in countries without traditional banking. That's just kind of a random aside.
As far as people buying stuff a lot of people who are sitting on huge gains from Bitcoin would prefer to spend it and fly under the radar tax wise by using it to live off of instead of cashing out via exchanges. On Amazon you can get groceries as well as many other day to day items you need.
I agree I don't think it will have a huge effect on price but I do think it could bring on a few new users.
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