Bitcoin sinks below $7000
bitcoincharts.com
bitcoincharts.com
I don't really want to get into another Tether discussion but someone who trades will be well aware that volatility is usually much more severe on the way down than on the way up.
Hence the saying "Equities take the escalator up and elevator down".
With Bitcoin we saw larger volatility on the way up, than on the way down, ie it went up in less time than it took to come back down.
This is atypical in the markets and suggests that something is propping up the price of bitcoin that doesn't exist in other markets.
The other place you see this is on the day of a IPO where the banks that lead the IPO defend the share price by strong artificial buying at the IPO price.
There's some circumstantial evidence that they may or may not have been printing unbacked Tether to keep the price at parity, but that's a far cry from powering the Bitcoin bubble.
[1] They were sort of a Tether exchange in the sense that for a while it was the only way for most people to withdraw USD balances, but they only kept a relatively small amount of USDT on hand to cover withdrawals.
Take a look at Cisco's chart from the dotcom bubble period. It took the elevator up - moving up 100% in a matter of months (adding ~$275b in market value, more than it has been worth at any point since) - and the elevator down. As was the case with most of the bubble valuation stocks at that time. The dotcom bubble massively exploded higher in the Summer of 1999, there was no escalator there. Typically in the case of bubbles, you get a gradual, aggressive move higher, then blow-off top and crash.
I'm given to wonder whether, if some agency has indeed been using printed Tether to artificially inflate the price of Bitcoin, then is it not likely that we're currently witnessing their unwinding of that position?
For example sovereign issuers of fiat currency insist that taxes are paid in their fiat currency.
Because that's what really makes a currency once we get past the facile "a unit of exchange" chat.
You could find a shop that takes bitcoin. You buy all your food there. Life is good, you are sat with your girlfriend eating croissants from this store. There's someone at the door. It's the government. Taxes time.
Your point about the state having a monopoly on violence is critical. They want their taxes, they will send you a letter. Then another letter. Eventually they send a guy with a gun.
I don't necessarily have a problem with the state having that monopoly. I'm not some raving libertarian. But the failure of bitcoin advocates to understand this distinction is wearing.
About $20m yesterday.
You have to subtract the transaction fees:
https://charts.bitcoin.com/chart/transaction-fees-value
About $2m yesterday.
Until 2020 this is the formula:
12.5 * 24 * 6 * priceEtherium is mined by GPUs at the moment. So its Etherium that needs to crash for GPUs to become available on Ebay. Etherium has been crashing too, but it seems to be a little bit more stable than BTC actually.
So keep your eye on Etherium prices instead. Maybe Monero (supposed to be a CPU-coin, but some GPUs mine Monero just fine). Those are better representative of the GPU-mining market.
The fear of missing out (on board) drives the price on the way up. The fear of missing out (get off) drives the price on the way down. Classic trading cycle.
Tbh, the entire "store of value" story never quite felt right, the original whitepaper was advertising it as currency, yet, it seems unusable for any kind of financial transaction at the moment. Even short term is a risk, the fees are just as high as the volatility and a bank transfer has simply become cheaper.
Well yes, but who would to want to use Bitcoin as a medium of exchange now? The period of fee inflation will surely have killed that off for all but trivial uses.
Similar rationale with Bitcoin as a store of value. A 7% 30 day vol vs USD is, well, chunky.
As a vehicle for speculation and short term vol trading it's clearly still a thing but that's not quite what it was intended for.
The same people that have always made up the bulk of actual bitcoin payments - people buying things on the dark web from markets that haven't integrated Monero yet.
If you want to store your USD, perhaps you should keep them in the form of USD.
You really want to look at a store of value in terms of other goods and services, not itself. (Major world currencies tend to be stable in value against common goods baskets in the short-term with slow inflation in the longer term, so comparing—especially over a short term—a more volatile store of value to a major currency can also;make sense.)
Now the gold price has, historically, been more stable than USD so there have been times when USD deflated so fast that the relative value of gold dropped by more than half over periods of a few years. But there were very few of these and this is not what's been happening with Bitcoin.
So, if you were comparing Bitcoin to gold as a store of value, you're not even vaguely close.
Not the expected crash, though: it's been going steadily down, which surprises me. I've always though the lack of liquidity would produce a crash-to-zero when the bear market came. But there appear to be people buying BTC even now. ... Who?
Possibly the same people who are already holding a lot and not selling, which is why the volume is low. If those people don't have a lot of free non-BTC assets you'd see some bargain hunting as other investors try to exit, but limited overall volume no matter how hard the rest of the market is running for the exits and driving the price at which the true believers can buy down.
I find it interesting that always around the full thousands there are sudden immediate pushbacks, for example when it dipped below 8000 several days ago it was pushed back to 9000. same happened at 10000 back to 12000.
It's probably someone trying to push the price up no matter what (or a shitload of orders with magic price points that people setup)