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Comment by songzme | Hacker News Reader

The most common question I get every day when the topic of bitcoin comes up: "This is skyrocketing. Is it a good time to buy?"

The truth is, there is no right or wrong answer. Bitcoins could very well go to 6000/coin and we'll still be asking that same question. Bitcoins could also just as likely go down to $1/coin and everybody would be talking about how they could've sold at $650/coin. The beauty here is that BitCoins is not managed by anyone, its completely p2p, and its 100% opensourced. Nobody controls it, nobody has insider info, nobody knows what is going to happen.

I would personally throw in a few thousand just see what it becomes. If nothing comes of it, think of it as a very expensive speeding ticket.

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"nobody has inside info"

It is not known who are making all the trades, wouldn't it be possible that a small group of large bit-coin holders are simply trading between each other in an effort to inflate the price... they have nothing to lose.

BTC to BTC transactions don't affect the exchange rate.

The exchange rate between BTC and USD is only affected by trades between the two currencies. Now the relative illiquidity of some of the major exchanges ( mtgox especially ) and the fact that it's relatively difficult to find counterparties definitely contributes to the volatility.

What I was alluding to was if you and I both held 100,000 BTC for example, and we wanted to push up the value of BTC so facilitate a sell off in the future... because of our large holding it shouldn't be too hard for us to accept a loss while we buy/sell large quantities as long as we push the price up higher.

If we were colluding to push the price up, we could both coordinate large buy/sell orders and dump them into the market adding volume and shifting the price a bit... people watching just see trades and see the price moving, thinking its credible trades...

I could be wrong, but if market buy orders take the lowest offered, and market sell orders take the highest offered I think it would work as I imagine.

This means those two parties now have a bunch of cash on hand and still hold a lot of BTC, they could now set a bot to continually put buy orders in at an escalating exchange rate. Also sell at an escalating exchange rate. Every now and then execute a large trade to push some volume into the market... it wouldn't work for every trade as normal people would jump in and buy or sell and take their cash/BTC... but on a long enough scale I think it would work.

> they have nothing to lose

the trading fees ?

Which are optional

How are exchange fees optional?

Use low volume

If they successfully push the price up 250% losing out on trading fees is a cost of doing business...

I don't think BitStamp or MtGox allow such dark trades. When you put an offer on those exchanges it may match anything on the book. Basically if you want to push the price up you have to make that price available to the masses.

Trade inside the spread.

Seems like pure speculation; finance stripped of any contact with the real economy.

I'd take that any day instead of speculative finance attched to food trade.

Hah, well that's one way of looking at it. In theory, though, speculation does play an important role with food, futures establishing scarcity or abundance over a long enough time period so that new crops can be planted, or new land brought into cultivation, to balance things out. Albeit, not sure about in practice.

This is the third time bitcoin price has spiked this wildly, you just need a log plot to see it:

http://blockchain.info/charts/market-price?showDataPoints=fa...

going by history, it would be wiser to buy in the dip after the spike.

small point: people who know regulatory rules and opinions ahead of the public can benefit, like some traditional insider trading

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