Bitcoin: Spectacular Slaughter
June 12th, 2011Warning: This is not a recommendation to buy, sell or hold any financial instrument.
Update: 20.20
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Update: Bounce Off MtgoxUSD 10.25
It hit a low of 10.25 and is currently trading at 16.08 x 16.32.
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The public participation phase of bitcoin was the most spectacular I’ve ever seen—with the typical, disastrous results for latecomers.
What we see here is a standard BARF frenzy.
Now, there is some support around mtgoxUSD 10. Supporting factors include the trend line connecting earlier pivot lows and the 50-day EMA. This would be the first opportunity to try to catch the falling knife.
If 10 breaks down, and that trend line, however, it will be a matter of watching volumes for signs of seller exhaustion.
Bitcoin Daily Interval
I’m guessing this’ll get up to it’s previous peak and stay stable for a few days… who knows? easy money to be made if I had some to spend… ha
Cryptogon and Bitcoins… two great tastes that go great together!
I looked deep into the trades on Friday when so much movement occurred. My impression is that someone had a limit order in to cash out roughly $100k if the price declined under a certain level. However, other people had limits to buy by the time that first guy got done selling, so there was an immediate rebound. Stunning to behold, really.
Kevin, I’m selling mining units right now that pay investors rougly 30% of their buy-in monthly (at current rates and difficulty). Get a hold of me if you want a proposal.
@Mike Gogulski
Have you seen this re: mining?
http://imgur.com/kEc5O
I was under the impression that it was pretty much over for individuals.
What’s the combined hashrate of your workers?
That guy is running 9MH/s in the aggregate according to his numbers. I have around 6GH/s online now, and another 2.5GH/s or so to be added in the next week or so.
PS: I’d desperately love either a “subscribe by email to comments” or an exposed comment rss feed button.
Urk, wait. I read his 9.000.000 as 9,000.000. He actually has 9GH/s. But whatever he’s doing, he’s doing it wrong. It looks like he has all 12 of his machines each running a Bitcoin wallet and mining each machine solo. The fact that each rig has a balance (of zero) is evidence of it. That’s dumb. He should be in a pool (or several), like I am. At the very least, he should be running everything off a single wallet — effectively his own local pool.
Whatever that setup is, it’s hardly optimized. He’s not clocking things consistently across the board (on a per-card-type basis), which suggests that he’s got no central smarts managing the systems.
One thing is for sure: he’s got decent air conditioning. I’m looking forward to moving most of my machines into a colo this week.
I know some will view this as libertarian vindication in the Age of the Internet, but this is becoming more difficult for me to watch every day. I also know this comment will likely be unacceptable or understood by most (or maybe I’m misunderstanding something here?)
I can get playing this game on the stock market, where they make no attempt to hide behind what they are doing, scraping off the wages and salaries of all the Joe Americans who think they can buy into the stock market and have someone manage their money to the millions.
I also understand that working the market is a major part of the posts on Cryptogon so in that sense this Bitcoin saga has its place on this website.
But this is quickly becoming a disturbing display of Do-What-I-Say-Not-As-I-Do Kabuki Theater.
I mean this is a fundamentally libertarian currency, created by a community of anti-Fed crusaders that have done nothing but rail against these tactics when used by the Big Banks and the Fed.
Now the Ponzi scheme has been created by regular people to be used on regular people and it’s utterly disturbing to watch it play out in such a short amount of time.
1)Create media storm for all to buy-in
2)Pull rug out from under and siphon off the the hard-earned cash of all those you convinced to join in the fool-proof money-fest
In short, inflate then speculate. Bad when done by the Powers That Be, but somehow acceptable when you’re the one making the killing.
This is why I have stayed far from Bitcoins and will continue to do so. Maybe I just know I would have been one of the schmucks in this case so I feel angry for them, but somehow it doesn’t seem to jibe with the stated goal of the project or any of the fundamental reasons it was created in the first place.
@j.biddy
If there’s a problem with what happened here, it’s that bitcoins can be exchanged for national currencies. Fiat paper can cause prices of all finite assets to fluctuate wildly. There’s essentially infinite dollars and a limited number of bitcoins.
This kind of thing will happen in any venue where national currencies try to rush into a finite space. Throw greed and then fear into the equation, and you’ll get a chart like the one above every time. Want to magnify the amplitude even more? Start markets for futures and options in the underlying asset. It doesn’t matter what the underlying asset is. You can even do it on blinking numbers (index futures and forex are hilariously ridiculous). Unfortunately, people want to do this with with bitcoin.
I happen to think that states cutting off the ability to get national currencies into bitcoin wouldn’t be a bad thing. It would force bitcoin advocates to use it as a medium of exchange. And if people want bitcoins, they would need to mine them, or sell something denominated in bitcoins.
Ponzi scheme?
The dollars, euros and other national currencies that people piled into bitcoin represent the diabolical Ponzi scheme of inflatable national currencies, the greatest scam of them all.
This is why I have stayed far from Bitcoins and will continue to do so.
Fantastic, but I hope you understand that, in the “developed world,” this fiat currency Hell we exist in forces everyone to be a speculator. Well, not quite everyone. In the developed world, those freegans who live out of dumpsters aren’t really subject to these situations as much, but they have other problems to contend with. Everyone else on the Death Star is a speculator, whether they want to believe it or not. Vader likes it that way.
I see no way out of this as long as inflatable mega currencies remain fungible. Personally, I play the game as little as possible for me. The freegans, writing on their scavenged Macbooks over someone’s open wi-fi router, will curse me for my elitist tendencies. *pfft* lol. Water off a duck’s back.
As for:
Now the Ponzi scheme has been created by regular people to be used on regular people and it’s utterly disturbing to watch it play out in such a short amount of time.
The creator of bitcoin is someone (or some group) who goes by the alias, Satoshi Nakamoto. In other words, we don’t know who created it. I wouldn’t assume that “regular people” are behind it, although that is certainly possible.