Bitcoin - What Goes Up Must Come Down

Discussion in 'HardForum Tech News' started by FrgMstr, Feb 2, 2018.

  1. FrgMstr

    FrgMstr Just Plain Mean Staff Member

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    There are lot of stories making the rounds this morning about the huge drop in Bitcoin cryptocurrency prices dropping like rocks lately, however it is worth noting that this is on the heels of huge gains seen at the end of last year. Of course if you bought at it's high of around $20K, it sliding below $8K this morning is going to look quite ugly. Remember you crazy kids, buy low, sell high. Make sure you don't get that mixed up. If you want to get mining, you check out our coverage from yesterday, Threadripper Pays for Itself Using Cryptocurrency Mining. Worth noting that mining and buying and selling cryptocurrency are two very different things beyond the costs associated with mining infrastructure. Thanks Donald H.!


    Bitcoin, the biggest and best-known cryptocurrency, fell as much as 15 percent on Friday to a two-month low of $7,625 on the Luxembourg-based Bitstamp exchange BTC=BSP. It clawed back some losses and was down around 4.1 percent at $8,623.50 in mid-morning New York trading. The virtual currency is down by close to 25 percent this week and almost 40 percent in 2018. The second and third largest virtual currencies, Ethereum and Ripple, also plunged more than 20 percent at the session low, Coinmarketcap.com said. Ethereum was last down 18.2 percent, at $913.37, while Ripple last traded at 80 U.S. cents, down 16.7 percent.
     
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  2. the-one1

    the-one1 2[H]4U

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  3. |-Goku-|

    |-Goku-| [H]ard|Gawd

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    I'm conflicted on this, on one end, I feel sorry for the people that bought high and now it is crashing. On the other hand, those same dumb ass people are the ones who took out a second mortgage on their house to invest and have lost a lot of money.

    Remember, don't invest money that you can't afford to lose.
     
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  4. Krenum

    Krenum [H]ardForum Junkie

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  5. jlbenedict

    jlbenedict [H]ard|Gawd

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    I'm guessing ebay and craiglist gonna get hit hard with loads of new sale listings..
     
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  6. SPARTAN VI

    SPARTAN VI [H]ardness Supreme

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    I'm conflicted as well. On one hand I do mine (with my gaming PCs, I don't have a dedicated 6 GPU rig or anything like that) so the $7/day at the present rate is less than half of what I pulled in earlier in the year. On the other hand, the GPU scarcity and subsequent gouging needs to stop if PC gaming is going to continue as my primary hobby.
     
  7. ruffbytes

    ruffbytes Limp Gawd

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    Now awaiting flood of cheap GPUs :)
     
  8. SomeoneElse

    SomeoneElse [H]ard|Gawd

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    This just follows the same behavior as the stock market.......this is just more volatile....Just ride the wave people it will come back up again....
     
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  9. ~CS~

    ~CS~ Limp Gawd

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    No, that's not happening for a while. Demand from miners will fall as ROI if far longer now, but still mining is profitable.
     
  10. I would be willing to wager the lower crypto prices will have to stay down over a month before you would see any appreciable sales of gpus.
     
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  11. SomeoneElse

    SomeoneElse [H]ard|Gawd

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    If gaming is your primary hobby you are in good shape.....others hobbies can / do get much more expensive. Im right there with you.
     
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  12. drklu

    drklu 2[H]4U

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    I look at it as a good time to buy for those that didn't get in earlier. One of my friends bought in at $16k, I tried to warn him ... lol
     
  13. -PK-

    -PK- [H]ard|Gawd

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    Banks are supposed to be treating digital currency purchases as cash advances now, so I was expecting the price to go back down a bit.
     
  14. natos

    natos Limp Gawd

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    So.....buy now?? I'm willing to jump in at such low prices...can't go much lower, and its boud to jump back up.
     
  15. Jagger100

    Jagger100 [H]ardness Supreme

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    Famous last words like
    "what does this button do?" - Christa McAuliffe
     
    Last edited: Feb 2, 2018
  16. I've ran a modified monte carlo and least square error analysis on a few cryptos and measured them against historical companies that had similar rises. I also used a modified 10th order LeGrange interpolation. While Legrange is highly sketchy as you go outside the data bounds, it's still a useful predictor of long term direction once the data has been normalized to account for large fluctuations using Savitzky-Golay. I used a wide standard deviation (for it's stability) for the monte carlos and ran 100,000 simulations.

    The bottom is falling out, and I predicted it would do so as soon as the government started regulating banking on it. That's the impetus for this crash was regulation and competition between currencies which have no actual backing. Bits aren't worth much folks, hate to tell ya.

    (No I'm not an accountant, or investment planner...I'm just good with numbers)
     
    Last edited by a moderator: Feb 2, 2018
  17. Rahh

    Rahh [H]ard|Gawd

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    Personally I think Bitcoin is going to get worse or even worse as it will go away. Regulations and tax will have exchanges not wanting to touch them at all.
     
  18. collegeboy69us

    collegeboy69us [H]ardness Supreme

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    Hate to say it -- even with this huge down turn mining is still quite profitable. For anyone that was patient enough to ease into building a farm or setting up a rig, long as you are paying less than 25 cent per kwh, you are still golden. Same goes for profit taking, anyone on top of their game took out some profit in the great times the past 2 or 3 months and can ride out even the nastiest of storms. Sure, everything is down 20/30/40% but I'm still up 5 figures due to early buys and some luck... I can't be mad at all.

    I learned a lesson from my first gen farm years ago, sold off a lot of 6950s, 7950s, etc and liquidated everything... hindsight is always 20/20. Anyone selling off now (hardware or coins) is probably someone who put in more than they could afford to lose, that fear and stupid move is going to cost them in the long run.


    Anyone that dipped into their 401, or got a 2nd mortgage buying in at all time highs... yeah they are feeling the burn but that's what you get in this high risk game without doing the math or research. Doesn't matter if it's bitcoin, stocks, gold, there's smart ways to go about it, and dumb ways. This huge dump to me is just a way to wind back the clock and score some great buys on stuff I'm interested in.
     
  19. gamerk2

    gamerk2 [H]ard|Gawd

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    Case in point: People are so bullish on the "real" stock market they're starting to invest out of their 401(k). No sympathies when the stock market undergoes a similar correction.
     
  20. Susquehannock

    Susquehannock 2[H]4U

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    So went the pump, now goes the dump. More specifically, fairly certain larger investors (banks, etc) were opening "short" positions all through the quick run up late 2017. Will be interesting to see how prices bounce back up after this big drop as said investors buy to close their positions. Only time will tell if it turns out to be a "dead cat bounce" or merely a blip in long-term viability.

    All this is eerily reminiscent of the dot com and real estate booms.

    Still on the sidelines with a big bowl of popcorn.
     
  21. bitcoin is so unstable it's among the riskiest of the investment strategies. Depending on where you are tracking with your retirement, if you are ahead of the game, historically, risky strategies do pay off better. BUT (and this is a big BUT) I wouldn't dare invest more than the percentage where you are ahead. That's like someone offering to pay you $10,000 to play 1 round of Russian roulette. But this is a highly loaded chamber if you compare rises to falls on bitcoin and it's volatility.

    Let me illustrate:

    Let's say you are 45 and your annual income is $50,000
    Age age 45, you need a MINIMUM 3x's your annual income in retirement savings. So $150,000
    If you have $165,000 in your account, you can probably risk $15,000.
     
  22. Relatively speaking, it's still on the small scale for global GDP. So it won't cause a market crash. But I see the SEC eventually getting MORE involved, along with more federal regulation.
     
  23. DarkStar02

    DarkStar02 2[H]4U

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    Maybe not bitcoin but other coins are still WAY up over the past 3 months. If you bought in at the end of December or early January you're probably hurting right now but overall, this is just profit taking. It'll bounce back.
     
  24. collegeboy69us

    collegeboy69us [H]ardness Supreme

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    it's not so much regulations and tax... regulation is a great way to legitimize many things. Taxes? that's one of the few certain things in life, and if you really are looking at crypto as a way to skirt them... you are acting like a child (i'm not saying you specifically). You don't fuck with the IRS, period.

    I've been around the block a few times, and BTC is in a market decline in dominance simply because the tech is old relative to what's out now. It's slow, costs too much to use, and has next to no utility outside of a store of value. When most of the world has moved to using ETH as a way to move value around due to the speed and low cost, that's a problem. Funny thing is, as much as I like ETH for it's versatility, it's still not the fastest on the block yet.

    If crypto wants to draw in the REAL money, regulation is inevitable, be it at a system level, or an exchange level or other. The inroads that XRP (Ripple) has been making in the financial sector is an example of a crypto that wants to do things by the book, the near instant settlement time is a kick ass bonus.

    It's been the wild west in the crypto world for a while - I still think 2018 will see some amazing stuff happen. The only people truly freaking out are the get rich quick scheme types who poured money they can't afford to lose into one of *the* most volatile "investments" possible. Lots of new people that don't have any clue about investment strategies, risk mitigation, and so on. It's like the stock market on meth and crack at the same time, it moves at the speed of light and doesn't follow any established rules or discernible patterns. For me it's fun hobby, akin to an intelligent form of gambling in it's current form.

    The one rule most often overlooked: don't put in more than you are willing to lose.
     
  25. Didn't read the article did you? Fall is caused by countries announcing outright banning and heavily regulating including India, China, and S. Korea.
     
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  26. Archaea

    Archaea [H]ardForum Junkie

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    I miss DPI's commentary in this post!

    "bitcoin is unstoppable"
     
  27. DarkStar02

    DarkStar02 2[H]4U

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    Admittedly I only skimmed it but the ban stuff is full on FUD. Regulation- yes. Banning- no.
     
  28. Again, didn't read the article did you?

    And regulation kills every benefit of crypto compared to something like Gold, or Silver.

    The kind of regulation we are talking about is:
    • We have to know the sender and what he owns
    • We have to know how much he sold and how much
    • We have to know who he's transferring virtual currency too.


    It's no longer anonymous or decentralized at this point but tradable as gold which is MORE stable and comes with a physical entity.

    S.Korea is still mulling serious legislation to ban clearing houses and trading.
    https://www.cnbc.com/2018/01/15/sou...to-do-about-crypto-exchanges-after-talks.html
     
  29. Read again.
     
  30. collegeboy69us

    collegeboy69us [H]ardness Supreme

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    Profit taking, chinese lunar new year, various hacks of exchanges, korea doing their usual flip flop on illegal vs legal status of crypto, people freaking about new from India that doesn't mean crap in the big picture, certain websites listing and de-listing coins at will due to arbitrage prices, the past. I agree it will bounce back in the coming weeks/months.

    So many people who bought at all time highs are the ones screaming the loudest thinking the world is coming to an end. my XVG stash is still up 1200% from my entry point.... most people who setup shop at the right time and made the right moves via strategic profit taking are sitting back like me with a bowl of popcorn watching the fireworks.
     
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  31. ~CS~

    ~CS~ Limp Gawd

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    Ripple is not even a cryptocurrency, hopefully it fails, because ripple is def a bubble. I wish people stop taking about it in the same sentence as Bitcoin and Etherium.
     
  32. naib

    naib [H]ard|Gawd

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    When the double-peak occurred I thought this was close to popping:

    [​IMG]

    Noe compare to Bitcoin... those events at the end of Dec, start Jan follow the "Bull Trap" profile

    Untitled.png
     
  33. bman212121

    bman212121 [H]ard|Gawd

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    Have you seen signs that point to it going back up? Trends are super important for something like this. If you were buying a stock to sit and hold on, you'd probably want to find something that has a long history and has signs that point to it trending upward. A good investor doesn't need to just grab it at the lowest price and then ride the wave to the top. They just need to try to predict when a stock is going to trend upward, and have enough time to get whatever number they wanted out of the stock. If bitcoin is trading at $5K right now, I might wait until I see an obvious trend that it's been climbing. I could buy in at $6k, and as long as it hits $7k, that would probably be enough to cover the expenses and turn a profit. I can then reevaluate whether or not it seems like it's still going to trend upward, then reinvest if I think it's going in the right direction. It makes absolutely no difference what the actual price of the stock is (To a point), the main focus needs to be on trends.

    A great example would be to look at Ford Motor Co. They went well over $20 a share back in 2001. They are currently trading for half that. Look at the graph on this page:

    http://www.macrotrends.net/stocks/charts/F/prices/ford-motor-co-stock-price-history

    Hindsight makes it super easy to tell exactly when you should have bought and sold it. But imagine if you had just saw the high and watched it drop down to $10 in 2002. You'd be thinking, it's super low, it HAS to go back up, we're talking about one of the biggest automotive companies in the world. Yet in 2003 the bottom fell out even more and it went down, not up like you'd swear it would have done. The thing is that smart investor would have taken small bites at this. They would have tried to pick it up in the low at $10, and probably sold it if it got to $11 or $12. They never expected it go to right back up to $20, and if it did in fact happen, they could have sold at $12, decided it was still on the upward trend and bought back in at $13 then sold again at $15. But they also would have planned for the other end of it. If they watched the trend and decided it was trending upward, they might have bought it at $11 or even $12. Then it started to go down. If it starts trending downward more than what you're willing to risk, you need to sell it off at a loss. If you sold at $9 you lost some money, but you can clearly see that that was still the smart move because it was going to bottom out to $5. When it started to give signs that it was going back up, you could try to invest again. In that example I might not have touched it again until it hit $8 a share, and sold at $10. That would allow me to have broken even on the previous loss. But as long as you're not putting all of your eggs in one basket, you should have had other stocks that averaged out your losses in the first place, giving you an overall gain. Take your toss and don't keep your money tied up, because you could have put that money to good use somewhere else to try to make a profit.

    I'm not an investor so you can take whatever I've said with a big old grain of salt, but I'm just spelling out that you need to treat bitcoin as what it is, and don't try to think about just throwing a wad of cash at and expected to ride the one big wave to huge profits. If you're serious about wanting to make money, diversify your investments and try to hit base hits instead of going for a home run each time you step up to the plate.
     
    Last edited: Feb 2, 2018
  34. Smashing Young Man

    Smashing Young Man [H]ard|Gawd

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    I hope this is systemic and results in the crash of all other cryptos.
     
  35. Susquehannock

    Susquehannock 2[H]4U

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    Agreed. And like it or not, such involvement & regulation would be essential for legitimacy going forward.
     
  36. celeron300

    celeron300 Gawd

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    Cryptos are the future of money, decentralized / capped number of coins available. If you haven't seen volatility before ( like the DJIA / Nasdaq/ etc) its because they aren't REAL markets. They are high frequency trading algorithims controlled daily. So buy the dip while its on sale folks. BTC will go above 40k this year.
     
  37. collegeboy69us

    collegeboy69us [H]ardness Supreme

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    The hardcore old school bitcoin people view it has a middle finger to "the man"... with some idealized mad max style vision for the future financial system. Sorry, long term that just won't fly on a mass scale. Skirting taxes, buying drugs online, that's all well and good but like it or not the vast majority of people don't want the crypto world to be the wild west. As with many other industries, products, or services, going mainstream means going legit and working within the laws setup by whatever government you might have. Short of all governments collapsing rules will exist for things like this. There are already anonymous cryptos out there fully capable of skirting the who/what/where/when points you call out in the regulations part.

    Being a physical entity no longer matters in our day and age as we progress technologically, sure there's utility in what you can do with gold and silver producing this or that, but value can be assigned to anything. The dollars in your wallet aren't backed by anything other than words from the government, it's value is just a collective agreement we all have with each other.
     
  38. sfsuphysics

    sfsuphysics I don't get it

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    Well think of this like a stock, except WAY more volatile, how do you know you're at the bottom, you don't. Now you can make an educated guess, you make a blind guess (kind of what you're doing) or you can wait for it to start to rise again (but not too much).
     
  39. collegeboy69us

    collegeboy69us [H]ardness Supreme

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    You have no clue what XRP is designed to do it seems -- it's a cross border platform that's designed for banks basically. To move money instantly and insanely cheaply vs the SWIFT/NOSTRO system we have internationally now. It's a company and product designed to play by the rules, and move trillions of dollars far faster and far cheaper than ever before. It blew my mind just how fast I was able to transfer value across exchanges in seconds vs hours and sometimes days with BTC.

    Judging by your child like mentality to wish failure on something you don't understand, and the fact you can't even spell Ethereum properly... I'm going to guess you are one of the get rich quick kiddos that can't grasp the concept of the right tool for the right job. BTC has enjoyed first to market status in the crypto world, the idea brought about a new way of thinking. Problem is scaling to meet the needs of the world, the constant infighting and forks of the network aren't exactly doing it any favors. Lighting network? hah that's funny.

    What's really funny is you are saying the same exact thing that countless people said about bitcoin in it's early days, and we see how that worked out.
     
  40. that looks like my LeGrange interpolation graph.