The Daily Stewart Jon Stewart bitcoin episode

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The price of bitcoin rebounded 16 percent on Friday after a week of price drops, in response to new fears of a Chinese government crackdown on the fledgling digital currency which sent it below $400 for the first time since November.

Bitcoin was trading at about $420 late Friday morning Eastern Time, after collapsing to $360 yesterday, according to the CoinDesk Bitcoin Price Index. The selloff earlier this week came as Chinese bitcoin exchanges, including BTCTrade.com, announced that they received notice that their banks would stop supporting bitcoin businesses next week.

Even with Friday’s rally, bitcoin is down about 50 percent over the last three months and more than 60 percent since it topped $1100 last year.

The price of bitcoin over the last three months.

CoinDesk Bitcoin Price Index The price of bitcoin over the last three months.

Still, a popular belief among bitcoin supporters is that while price volatility does need to decrease for mass consumer adoption to take hold, the media places too much value on it. Instead, they say, the disruption made possible by the decentralized network of computers through which bitcoin moves is much more important in the long run than the price of bitcoin itself.




6 comments
Neal_Palmquist
Neal_Palmquist

"Bitcoin was trading at about $420 late Friday morning Eastern Time, after collapsing to $360 yesterday, according to the CoinDesk Bitcoin Price Index. "


That index you are looking at is corrupted by very lazy data handling.


I saw with my own eyes the trading hit near $328. 

Neal_Palmquist
Neal_Palmquist

I don't have patience to explain this. I apologize to readers of my comments. Please just take my words at face value and see for yourself.


When the USD is stronger than all other FIAT currencies and gold prices drop in the face of that new strength, Bitcoin prices go up. It should not cost even more of those even stronger USD to buy a Bitcoin but it always does.


So when the USD gives back that ground and drops in the race, Bitcoins are cheaper. Bitcoin does not have an inverse relationship property to the USD as the propaganda taught as conventional wisdom in the Bitcoin community states. You can see the truth for yourself.


Any violent jump in gold prices based on the demand for the metal itself has an immediate punishment on Bitcoin prices. I suspect this is flight to safety out of Bitcoin into hoax gold backed cryptos. Selling of other hoax currencies will make it rain Bitcoins onto the Americans with cash in the Bitcoin exchanges.


It is really getting old how everything is China's fault all the time. Next time it crashes will be China's fault again or the IRS or the Mt. Gox civil suit or it may even someday be blamed on me, personally. Who knows? But never will you read a story that tells the truth.


The bounce was BEFORE the crash as USD had a very good day. Stronger dollars inflate the price of Bitcoins as it is nothing more than a bundle of United States Dollars. People pay even more of the even stronger USD to capture that strength. It is like a B12 shot for Bitcoin.


The dollar gave up it's strength at the exact same time gold showed an overnight jump that wasn't even really that big. Spike in gold prices ALWAYS punish Bitcoin. Bitcoin is too over valued to recover in kind in an environment of gold weakness. Before Bitcoin can recover, gold will move back up in another little spike and knock Bitcoin off balance again.


The Bitcoin low at the worst of Mt. Gox was $400. Weaker USD plus punishment of the gold price spike pushed Bitcoin from it's already dangerous position down under the psychological threshold of $400. If I remember right, the low in this crash was $328 or very close to that level. It will be the new bottom when panic hits like yesterday again.


China did nothing this time and they are laughing at Americans who believe this propaganda. 


Bitcoiners are most vulnerable when gold trading closes on Fridays and does not open until Sunday night. There is no escape route from BTC to  USD to gold. The only escape for trapped Bitcoiners is into gold backed cryptos and those sales make the Bitcoins rain onto the exchanges.


This crash is nothing compared to what can happen on a weekend. Just saying...

krkeegan
krkeegan

BitCoin seems to have a fundamental problem.

 The value in a currency is its stability, if I exchange $20 today for BTC, I want to be sure that my BTC will be worth $20 tomorrow.  This can only happen if BTC becomes a bad "investment."  In other words I should make very little money by simply holding BTC over a long term, at least in comparison to holding some other form of investment such as T-Bills. 


 But as soon as it becomes a bad investment, the media will immediately write it off as a failure, which will cause a decrease in the desirability to transact in BTC and cause the price to drop and yadda yadda yadda.

 How do we ever get to a place where BTC is stable?

FF22
FF22

So some idiots are still buying and selling this toy money, just because they think there are even bigger idiots in the world than them, who - one day - they will be able to sell their virtual coins to?

Neal_Palmquist
Neal_Palmquist

@krkeegan  


I see it almost like you do, but in terms of purchasing power. If my twenty crashes to eighteen then I will need to buy even more Bitcoins before I can buy my $20 item. I lose purchasing power when the price drops.


But I also lose purchasing power when the price goes up because merchants cannot afford to lose their merchandise. So they throw my bitcoins onto the exchanges like live grenades. They also only sell low quality, after market items. As the price of Bitcoins goes up, vendors protect themselves from danger by pulling away quality items of value.

Neal_Palmquist
Neal_Palmquist

@FF22  

The more you understand how Bitcoiners think, the more you will see how to fleece these willfully ignorant fools.


I'm waiting for a 98% crash from the all time high to sell them silver collectible coins. They will think my silver is cheap and give me the Bitcoins that will recover in price as the second wave of fools rush in.


I could lose my silver if Bitcoins never recover, but it won't hurt me as bad as everybody else who will get burned. 


But when I sell out of silver and I have recovered Bitcoins, I'm going to sell and buy even that much more silver to have in hand for the next crash. I made up this strategy myself. I call myself a Silver Bear. Bitcoin will have to carry me over the cliff with it to kill me. I believe I can feast on all the Bitcoins I can possibly want as long as I never spend USD from my pocket to get them. It should be easier to trap them when they are panicked and fleeing in terror.


I am almost convinced that Silver Bear might prove to be far easier and more productive than mining Bitcoins.


Think of ways to remove USD from the calibration. Bitcoin is not an alternative currency to the USD. Rather, it is a suicide cult that worships USD. They are paralyzed in fear to make any move at any point in time without calibration to the dollar.


It is God's will and your duty to fleece stupid Americans who pay cash for Bitcoins. Stop those fools from letting those dollars leave the country in exchange for absolutely nothing. Our country is depending on you, soldier.


Happy hunting!

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