In these charts, are the outer edges real, or just plotting artifacts?

I mean, does the leftmost edge of the green plots indicate the lowest extant bids in that exchange, or just the lowest bids that were considered by the plotter?

Ditto for the right edge of the red (ask) plots.

Thanks!

Does this mean that BTC-e is closing down: 

  http://bitcoincharts.com/markets/btceUSD_depth.html

If I read correctly, bids and asks add up to a few hundred BTC only.

Can we trust the data posted by those exchanges?

Are those bids and offers real? Are the transactions real, or just being simulated to sustain a price that finds no real buyers?

During the crash, when the price was down to 800$ on its way to 550$, Mt. Gox stopped reporting the real data, instead looped the last 5 minutes over and over, at least 5 times.  Was that a bug, or were they trying to hide the crash?

By now everybody who has looked into this market must have realized that, even if the bitcoin survives as a currency, its market is a pyramid schema (or, euphemistically, a zero-sum game): every profit one makes by investing in bitcoins must be the loss of someone else.  So, can we trust that operators of sites that serve a pyramid schema?

I know nothing about commodity or currency trading, but this is how I interpret this chart:

• Most buyers and sellers are sticking to their positions (for severals hours now).  Compare to this chart from dec/06:
  
• On the right side there are a bunch of people who bought BTC at around 1000 USD, and ar are now stubbornly asking that amount in order to limit their losses.
• Many of them love round numbers so they area sking 1000 USD exactly.
• A few of them realize that even if the price rises to 1000 USD there will not be enough buyers for all that offer.  So they are asking 995 USD, 970 USD: they will lose a bit more but they will be in front of the line when (if) buyers raise their bids.
• A small bid at 920 USD was canceled around 15:15. Another small bid at ~950 USD was canceled around 15:57.  Since the red plots did not budge, presumably those guys either gave up, lowered their bids below 870 USD, or bought those coins outside of MtGox.
• Around 15:40, someone who was selling a few coins at ~960 removed his offer. Again, since the green plots did not change, he either raised his bid to 1050 USD or higher, gave up for now, or sold outside of Mt Gox.
• To satisfy all the sellers who are asking ~1000 USD or less one would need all the buyers who are asking ~870 or more.  Where are they going to meet?

Makes seinse?

Correction: since that was the lowest extant offer, presumably a new eager buyer came in with a bid that matched that offer, and that bid was processed immediately so it did not disturb the green plots.

On the buyers' side, a few small buyers who were biddiing beween 900 and 915 USD raised their bids by a few dollars.  Nothing else changed. 

In the sellers' side, around 17:10 someone offered ~250 BTC at exactly 950 USD, near the low end of the offers; but the offer was gone 10 minutes latter.  If he sold, it was not to any of the outstanding buyers.

Makes sense? 

It is hard to tell, but it seems that all the transactions that pushed the price above 1000 were by new buyers that came in matching the lowest offer, rather than old buyers raising their old bids.  Note that the drops in the red lines, that eventually ate away the 1000 USD cliff and then some, are not matched by drops on the green lines.

Some buyers who were bidding between 920 USD and 950 USD appear to have raised their offers to near 1000 USD, but then pulled back.

Yes, there are still plenty of fools down here. (Police just busted a huge Ponzi/pyramid scheme called Telexfree; many investors are now suing the government for the right to keep investing in it.)

And there are also many corrupt politicians, state officials, and other scammers who need to move money out of the country, and have realized that the usual channels through offshore banks are no longer safe from the police.

There is a docudrama out there about the rise and fall of Enron.  
http://www.youtube.com/watch?v=0zMakN-EMLg
You should check the very last scene of that.  

From the charts I understand that some 200,000 BTC were traded on Mt Gox while the price was above 1000 USD.  Presumably some coins were traded several times, but even so there must be atleast 20,000 bitcoins, possibly over 100,000, that were bought by their current owners at over 1000 USD.

I suppose that those people will be unwilling to sell for less than they paid for, unless they are convinced that prices are abot to crash for good.  They must be the ones setting the price now.   Relatively experienceed buyers who have open bids in Mt.Gox seem unwilling to raise their bids to meet the sellers; the market is a standoff as it was for several hourse before the last rally.   But now and then some outsider comes in determined to buy some small amount of BTC, so it bids at the lowest price that will buy him that amount.  It is these small transactions that  define the current price.

You all understand that bitcoin trading is just a kind of gambling, right?

Right now, on Mt Gox, if someone decides to buy 100 BTC at the lowest possible price, the price will shoot up tp 1020 USD.  If someone decides to sell 100 BTC at the highest possible price, the price will drop to 990 USD.  That is why it is jumping about like crazy.

That's actually 3% from lowest to highest.  In a matter of minutes.

With 1000 BTC one could swing the price down ~980 USD or up to ~1050 USD (7%).

Granted that many journalists/economists do not understand the computing aspects, but on the other hand many computer people do not seem to understand economics. 

I have asked in the Economics board what would be the expected state of the "bitcoin network" 15 years from now.  No one knows what will be the value of a bitcoin, of course.  But people cannot even answer (with justification) the more basic question of whether the value will be stable, will grow of fall gradually with time, or will be as chaotic and unpredictable as it is now.

The bitcoin value is one aspect of the system; which includes also exchanges, regulations, distribution, usage petterns, etc.


Predictable changes, like a steady inflation or deflation, or seasonal variations. People can adapt to them. Volatility is unpredictable changes in value, and that is one thing that bothers economists: they cannot see how a commodity whose value can change 10% up or down in a day, unpredictably, could be used as a payment method (except for illegal trade where bitcoin is the only option, so profit margins can be high enough to cover such swings).   For them, volatility must be reduced before  it can be used for real trade.


That is another stumbling block for economists.  Infation encourages people to spend or invest their currency as soon as possible, thus keeping the economy in motion.  Deflation has the opposite effect, it encourages people to hoard the currency.  If bitcoins increase in value, they will be hoarded, and therfore will be less used in trade, and therefore their usefulness will be limited, and therefore their value will collapse. How will this paradox get resolved?

Bitstamp is dropping fast. BTC-China is dropping fast. MtGox is stuck as usual.

They would use old inflationary dollars to buy things, and hoard the deflationary bitcoins.   Thus if the material value of a bitcoin keeps growing, bitcoins will be used only where they are absolutely needed.  If the value keeps decreasing, the total value of bitcoins will decrease too, and soon they will not be enough for trade.  The conclusion seems to be that the value of a bitcoin must/will remain constant  It also seems that they will only account for a small fraction of all trade.

Those who make iphones want to drink wine, and those who make wine want to have iphones, and both need them today not tomorrow; that is why people will trade.  As for money, the deflation = hoarding rule hs been confirmed in many ways.

Bitcoin trading is a zero-sum game, each person's gain is someone else's loss.

If the ordinary money (USD,EUR,...) that you put in is less than the money you got out, consider yourself lucky; if you can make even more ordinary money by selling your bitcoins, better for you.

If the money you put in is more than you took out, then you are provisionally a loser. The only way you can avoid becoming a definitive loser is to find some other loser who is willing to take your loss by buying your bitcoins at a price that will clear your deficit (including bank and exchange fees and the interest you could have earned by investing your money elsewhere).

You may find that redeeming loser right away.  You may have to wait years for him to come up.  Or he may never come up.

The bitcoin market will crash once every sucker with money gets smart and realizes that all other suckers got smart too.

So, what you need to keep the bitcoin market from crashing is an ASIC miner that creates new suckers with money, rather than new bitcoins.

I do believe bitcoin is technically sound and I do understand the value of bitcoin if it worked in practice as its proponents hope.

However I do not believe that it will work, for economic reasons, not technical ones.  These objections have been made by many, and I have not seen them answered.  

Wouldn't there be bureaucratic hurdles in that?  Have there been auctions of similarly immaterial property before? (Say, author rights, real estate on the Moon, club membership rights, etc?)

I wonder how they will do it, exactly? They will need the current owners' private keys, right?

Why would they do it that piecewise, rather than all at once?


I don't know.

Suppose that instead of bitcoins he had the money deposited as Swiss francs in a Swiss bank account, and the FBI got hold of the bank account number and password.  Could they just transfer the francs to another account in the same bank and auction them, or convert them to USD?

Or suppose that he had placed a large bet on the outcome of World Soccer Cup 2018.  Would the FBI auction his betting ticket?

Thanks!

Trading volume seems to be decreasing (15,000 BTC daily at MtGox/USD and Bitstamp/USD) , and most of it seems to be speculative rather than commercial.

At MtGox the price seems to be jumping up and down by 10 USD, more than once per minute, but on very small volume; while most bid/ask orders are still.  Is that attempts to drive the price across the bid/ask gap? Or to "jog" it so that the charts are not all red?

My guess:

Imagine that the cumulative bid and ask plots are the sides of a valley. (Turn that part of the chart 90 degrees counter-clockwise)  Fill the valley gradually with water. At each level of the water, mark the midpoint between the left and right banks.

That plot would be read as follows: suppose that we pair up the highest bids with the lowest offers, at a price that halfway both.  As you do that, record the current price on one axis, and the total amount traded so far on the other axis,

Makes sense?

My interpretation of those charts:

1. The people who believe that a bitcoin will be worth a zillion in a few years are not in those charts.  They are holding all the bitcoins they have, and whenever they can get or borrow any more money, they immediately buy bitcoins at the current ask price.  Since we do not see much of the latter happening, it means that the believers that remain have largely run out of money.

2. The people who have posted offers to sell (the red "ask" mountain at right) are

   2a. people who bought bitcoins at 900-1200 USD.  They are waiting for the price to return to the same level, so that they can get out without losing money.  Many will probably hold their offers at those levels even if the  price falls off the bottom, because they would ratehr keep hoping for the impossible rather than admit their mistake.  Only very reluctantly they will lower their ask price and accept a loss.   On the other hand, if the price ever returns to the 900-1200 range, the smarter ones will sell out and quit.

   2b. miners and other people people who bought coins at much lower price, and bet that the price still may get up to the 900-1000 range.  They are likely to profit even if they sell well below that, but will try for that level only for greed.  They are likely to lower or raise their ask price as the price moves, and will sell as  the chances of higher prices seem more remote.

3. Most of the people who have posted offers to buy below the current price (the green "bid" mountain at left) do not believe that the price will get much higher than that.  They  are assuming that if the current price is (say) 900 USD, then it will probably remain in the 850-950 range for a while.   So they offer to buy at (say) 850 and wait for the occasional customer who "must" sell a bunch of bitcoins at any price.   Then they immediately post an offer to sell those same bitcoins at (say) 900-950, and wait for the random guy who "must" buy bitcoins at any price.  By repeating this move they could make 5% profit on their capital, several times a week.   However, this strategy only works if they keep their offers to sell at the front of the "ask" queue.  So they will watch the market carefully, and if they see a large number of sellers lowering their ask prices to (say) the 850-950 range, they will immediately lower their bids do buy to 750-850 range.  

Thus:

  A. The mountain of sell offers asking 900-1200 USD cannot be taken as an indication that the market has faith in bitcoin;

  B. The mountain of buy offers which is always 50-100 USD below the current price is not a buffer against a massive drop in ask prices, because it will recede with it.

Does this make sense?

BTC-China fell from 5320 to 5060, and is back to the low price of 18 hours ago.  Yet Bitstamp and Mt.Gox are stuck at the hight of a few hours ago.  If they had followed China, Bitstamp should be at 820 USD (not 850) and Mt.Gox should be at 860 USD (not 900).

Bitstamp and Mt.Gox seem to be quite dead.  Are their transactions real, or is there some manipulation going on?

Police here in Brazil just busted TelexFree, a huge pyramid scheme that sold crappy Skype-like phone credits.  Tens of millions used all their savings and borrowed money to get in before it collapsed and the organizers were jailed.  Victims who lost everything are still begging the courts to let them continue trading.

Yes, Bitcoin may have a future here.  8-(

Actually it shows how the bids and asks charts changed over the last 1 hour, every few minutes.

The most recent situation is at front.

You can see here, for example, that someone had ~900 BTC for sale at 850 USD, but cancelled the offer at ~14:10.

A few minutes later another sell offer of ~100 BTC at 845 USD was cancelled.

Over the last half-hour, someone who was offering 50-100 BTC for sale at 880 USD gradually lowered the ask price to 850 USD.

At ~14:15 someone else cancelled a bid to buy ~700 BTC at 800 USD.

And that is pretty much what happened at Mt Gox during that hour.  

The "current price" oscillated between 840 USD and 810 USD but on very small transactions.
[/quote]

To me it seems that Gox is as dead as a Norwegian parrot.   No serious trade there, just a bunch of stubborn sellers who cannot bear the thought of telling their wives what they did with the kids' college money, and a bunch of speculators that bid at price minus 50 to catch the occasional fresh fool and promptly retreat when they see the Ask Mountain coming down their way.

He he.

Today BTC-China fell 21%, bitstamp fell 21%, MtGox only 13% (and started out 40 USD higher than bitstamp).

Perhaps they choose the wrong branch when the Universe forked some time ago.

BTC-China is now at 3400 RMB, back at the Nov/18 level, before the First November Bubble.
It lost more than 50% since the Nov/30 peak (7600 RMB)

"Rare" does not imply "high demand".

Bid "walls" cannot be expected to hold against a general drop in the perceived value of bitcoin.

Most of the bids 3-5% below the current price must be market players waiting for someone who must sell a few 100s BTC at any price;  whose coins they will promptly offer to sell at 3-5% above the current price, for someone who must buy a 100 BTC at any price.   Those players will ignore changes in price due to small transactions, but if they see that the whole Ask Mountain is coming down, they will quickly lower their bids too, to preserve their margin of play.

Mt.Gox just reached 666. Who asked for it?

Mt.Gox is now 50% below its peak value.

Someone mentioned Enron, here is what it looked like:
http://netwmd.com/articles/article202.html

BTC-China is now at 1/3 of its peak value (7600 CNY).

If you buy 100k USD in BTC, and by next April 15 these are worth 1 million USD, will you have to pay ~300k USD to the IRS?

Does it matter whether the IRS considers Bitcoin a "stock" or a "foreign currency"?

BTC-China is now well below 2530 CNY, 1/3 of its peak value (7600 CNY)

Thanks, but that seems a question people should worry about: "will the IRS (or your nation's equivalent) consider BTC capital or cash?"

yesterday (and most f the time it seems) Bitstamp and Mt.Gox followed BTC-China rather closely, apart from certain scale factors.

However, when BTC-China fell too much and too fast the other two seemed to be trying to hold the price up:

It is 9:00 am in China, is that bank opening time? Cybercafe opening time?

Trade volume on BTC-China spiked and price fell sharply by 100-150 CNY.

Would this work:

  * Buy BTC with USD outside China
  * Sell the BTC in China for RMB
  * Use the RMB to buy goods or stock in Chinese market
  * Sell goods/stock outside China for USD

or the other way around.   Not for amateurs, of course.

This would equalize prices but according to some "exchange rate" that is not the official one, due to extra costs.

Which is what we see, right? They track each other but not at the official exchange rate.

If you have deep pockets you do not need to transfer funds right before/after each purchase.  You start with a large pile of USD (or RMB) and end with a large pile of RMB (or USD) that is worth more than what you started with, even though it may take months or years to get it out (or in).

OK maybe it is the wrong name. But it would explain why the exchanges track each other so closely.  Once the player figures out the actual ultimate "exchange rate" he can get, it is profitable to buy BTC in one market and sell them in another, whenever the price ratios deviate from that rate.

For example, as of yesterday it would seem that pocketing one USD in Japan (that's where Mt Gox is?) is as good as pocketing 5.3 CNY in China, even though the official exchange rate is 6.07 or so.

Yodel forever? http://www.youtube.com/watch?v=B00nfVc4FPI

Every country tries to control the exchange rate of its own currency, e.g. to balance the interests of industries with domestic market that depend on imported materials versus those whose market is mostly overseas.

Bitcoin trade provides a way to bypass those controls, and usually results in transfer of actual wealth from some countries to others.  The latter will smile on Bitcoin trade, the former will move to stop it.

Right now it seems that the US is smiling while China is not.

Goodwill in the US may evaporate (as it did for Madoff's enterprise) if some large US player loses big on BTC trade. Until then, regulators will not be upset if a few whales become filthy rich at the expense of many small fish. Quite the opposite.

In real life, traders would avoid a market that lets them sell their wares but will not allow them to take their money out.

So, if people cannot take their old-fashioned currency out of MtGox, why are people using it?

Actually Mt.Gox is still tracking BTC-China. (Or the other way around? Or both are tracking someting else?).
However the "exchange rate" jumped by some 10-15% since Dec/17.
The chart below shows hourly closing pricesfrom Nov/28 (day "-2") 00:00 to Dec/19 21:00.

I wonder how many people in the Bitcoin trade see BTCs as a tool to earn USDs, and how many see USDs as a means to grab more BTCs.

The exchanges Mt.Gox , Bitstamp and BTC-China still follow each other very closely.

However, there have been a few discrete adjustments in the apparent "exchange rate" between CNY on BTC-China and USD in the two other exchanges.

One such adjustment happened between 18:00 and 25:00 Dec/16 UTC  (from ~5.650 to  ~5.200).  Another one took place about 12:00 to 18:00 Dec/17 (from ~5.200 to ~5.000).  The rate may have increased again a bit earlier today, around 03:00 Dec/20 UTC (from ~5.000 to ~5.200) but it is too early to tell for sure.




My guess is that there is arbitrage going on, either by different players at different times, or the same player who occasonally changes his expected "worth rate" between having 1 CNY in a BTC-China account versus having 1 USD in a Mt.Gox account,

By the way, it seems that 1.00 USD in Mt.Gox is worth only 0.96 USD in Bitstamp.

Here is a theory: those who saw BTC as a way to earn USD have already left the market, too volatile
and unpredictable.  Those who remain are people whose goal is to grab as much BTC as theyr can.
So they are all trying to trick each other into selling their BTC, while holding fast to their own.

I am totally naive about financial analysis, but my basic statistics tools are unable to find any correlation between changes in price and the price's past history.

To be specific, they tell me that the closing price for the next 1-minute period is the last closing price plus a random variable with nearly zero mean.  This variable has no simple (linear) relation with the earlier 1-minute closing prices.  Knowing the last 5 closing prices is as useful as knowing just the last one.

As a currency for global commerce, any criptocoin is in principle as good as any other. All that is needed is a way for customers to change old money for crypto, and a way for merchants to do the oppsite. The choice will depend on secondary factors such as convenience, transaction speed, fees, volatility, etc.

As for investment or speculation, the value of a cryptocoin will depend on its usefulness and scarcity. But if all cryptocoins are equally useful, and their total supply is infinite...

Could it be arbitrage trading?

Are these charts up to date? http://bitcoincharts.com/charts/volumepie/

Why is the price of Bitcoin now 750 USD, rather than 0.75 USD or 75,000 USD?

Why would a business accept Bitcoin but not Litecoin, Dogecoin, or CitiBankCoin?

As others have answered, it is not Death but Father Time, a  common image for the year that is ending.

The real question is: why is his sand clock leaking?

Someone is playing ping-pong on MtGox. Ping is a transaction of a few bitcoins at some price X in the gap between the highest stable bid and lowest stable ask. Pong is a similar teansaction at a price Y some 5-10 USD below X. Each transaction seems to be a small bid immediately follwed by a matching ask, or vice-versa.

There is at least one ping-pong per minute, perhaps more. The average values of X and Y creep up by 1-2 USD every few minutes. Sometimes X stops before hitting a substantial wall, while Y keeps creeping up.

The effect is to make the mean price move up steadily for many minutes. Presumably this convinces other traders to revise their orders upward, so the ping-pong can continue creeping up as the nearest sell barriers move out of the way.

This ping-pong has been going on between dumps since dec/30 at least, with some interruptions.

Ok, but the ping-pong volume seems to be 2/3 of the total volume at MtGox (between dumps) if not more. And the real spread seems to be fairly constant while the ping-pong limits slowly increase.

Edit: added "(between dumpds)"

Eyeballing the charts, I would guess that ~300 kBTC were bought at over 900 USD each on MtGox alone.

Some of those buyers may be Believers who will hold the Bitcoins no matter what. But some must be waiting for Traders to raise their bids high enough.  Someone who bought 10 kBTC at 900, for example, may wait until there are 10 kBTC of bids above 900, then dump all at once.

The Traders caught on that trap will of course have to do the same. So the price will probably stay in the 900-1100  range for a long time, sustained not by hope of a bright future but by reluctance to cash at a loss.

Yes, some of those buyers may believe that the price will rise above 1200 "soon" and hold on to their coins. But if "soon" may be 1 year, it may also be  5 years, or never. Some of those buyers may prefer smaller but safer gains; some may have to repay loans or buy a car to replace the one they sold...

The point is that there may be as many as ~500 kBTC (from all exchanges) off the books, waiting for bids to build up in the 900-1200 range.

Isn't that the ping-pong I mentioned earlier? My guess is that it is a trading robot that sells to itself, alternating between two prices that increase 1-2 USD every few minutes. Has been going on since 2013-12-30 with a few interruptions.

Each transaction has a buyer and a seller. Can you tell whether the buyer and/or the seller is always the same?

My guess is that the ping-pong robot posts an offer to sell and immediately buys into it, or vice-versa. These transactions add to ~100 BTC per hour, and a large fraction of MtGox's volume.

The ping-pong game at MtGox has stopped for a couple of hours now. Volume fell to less than half.

Creeping ping-pong on again at MtGox since jan/04 05:00 UTC. Ping stuck at ~880, pong slowly rising. Real bids/asks largely frozen.

Am I reading the charts right? Huobi is trading 100 kBTC per day?

If I read the charts correctly, Huobi has 10x the volume (in BTC) of MtGox, Bitstamp, and BTC-China.

If that is the case, Huobi defines the price of Bitcoin, the others  basically follow it through arbitrage trading (except that 1.00 USD in a MtGox account is worth only 0.90 USD at Bitstamp, for some reason).

Why do people claim that Huobi's volume is faked?

Thanks!

I strongly suspect that at least 5000 BTC/day of MtGox volume is fake (the ping-pong I mentioned earlier). Then there are spurts of higher volume when the price is changing fast, obviously due to speculation.

The non-speculative (commercial) trade seems to be less than 5000 BTC/day. How much less?

See my signature. I am a skeptic...

You all saw this I suppose:
http://techcrunch.com/2014/01/05/taiwans-government-says-no-to-bitcoin-atms/

Could there be also robots that place large buy orders just below the curent price, to give the illusion of strong support, only to cancel or lower the bds as the price gets lower?

Huobi fell from ~5020 to 4818 in a few minutes, then recovered somewhat and is hovering around 4900.

But there is no need to follow it, Bitstamp and MtGox are doing it for us.

I was going to post that Huobi just touched 4600, but before I got a round tweet it was already 4500. But presumably the roller coaster will go on for months...

Edit: In the time it took me to write this post, it fell to 4300 4200 back to 4500 for now.

The gap means that having 1.00 USD in a MtGox account is as good as having ~0.85 USD in a Bitstamp or other exchange's account.  The widening means that the "Gox dollar" is losing value.

Please excuse my insistence, but keep in mind that there are (by my estimates from the charts) somewhere between 50,000 and 300,000 bitcoins out there that were last bought in late nov/2013 at 950 USD or more.

Many of the owners of those coins must be speculators that were attracted by the fast and steady rise in price. (True believers presumably bought all they could much earlier.)

Being speculators rather than believers, they must now be looking for a way out of this unpredictable and unregulated roller coaster without losing much money.

Therefore, those owners must be waiting for the price (and enough bids) to get back to the 1000 USD level to sell their thousands of coins. (There is no reason to assume that the asks in the exchanges' books represent the true volume of coins that will be sold at those prices).

Therefore I expect the price to wander at or below that mark for quite a while. Note that the suckers new investors who will buy those coins will be in the same situation.

That is called "arbitrage trading". As far as I can tell, it is happening all the time and is keeping all markets in lockstep, even those of other cryptocoins. 

The difference between MtGox and the others seems to be due to the difficulty and cost of getting USD out of there; it cannot be exploted for arbitrage, on the contrary it is arbitrage that keeps the ratio relatively constant in spite of the large price fluctuations.

Because they bought only after the rally was well under way. If they believed in Bitcoin they would have bought much earlier. Even if only half of those late buyers are speculators, their holdings must be much more than what shows up in the order books.

I am referring to the people who bought after the price was near 1000, just before the peak. The volume exploded during the rally; it is unlikly that the buyers were all Believers.  Besdes, for every buy there was a sell, so many of those who bought before the rally clearly were not Believers either.

I would guess that almost all the trade we see, in all exchanges, is due to speculators trying to earn old money by exploiting Bitcoin's volatiliy (or trying to minimize their losses before jumping out). That includes any robot trading and manipulation that may be happening.

As others have pointed out, people buying things with bitcoins (whether through Bitpay or similar service, as seems to be generally the case, or by direct barter) is the same thing as selling them.  Besides acting to lower the price of bitcoin, that is the opposite of "hodling", right?

Ordinary people still have no reason to use bitcoins (rather than old money) to buy things on retailers like Overstock.  So that option should not bring more old money (USD etc) to the Bitcoin market.

Speculators and miners who want to leave the Bitcoin game now have the option to cash out in merchandise (at a few merchants) rather than in old money.  That only makes it a bit easier for them to decide to leave, and hence take old money out of the market.

So the Overstock news is "good news" only for True Believers, who did not need it to believe anyway...

One cannot claim a profit until the bitcoins have been exchanged for old money, merchandise, or services.

Those who profited 1000% are those who bought at 100 USD and sold at 1000 USD. Obviously they do not have the bitcoins any more and cannot "grab profits" again.

Those who have bought at 100 USD and not sold yet may want to cash out with profit at any time, most likely when they suspect that the price will not rise fast enough in the future. 

Those who have bought at 1000 USD will only be able to make a profit if the price rises again above that level.  They may despair and sell at a loss.

That is the same as saying "sell your bitcoins".  Good for hoarders, bad for the price...

It is evident that all the markets, including China, have been tied together to this day.  Since its volume is 5x that of any other market, its is a reasonable guess that it is the elephant that is dragging the dog rather than the other way around.

Whoever is the leader, the reaction on the others is very quick. Perhaps one can tell who is the leader by looking at the minute-by-minute trade data. 

(Methinks that it does not matter whether the Huobi volume is due to humans or robots. Manual day traders generally use "dumb" strategies that make them behave like robots, only slower ones.)

"Fake volume" is someone (possibly the exchange owner) selling to himself, either through one account or multiple accounts.  I suspect that some 5.000 BTC of MtGox's volume was "fake" in this sense, intended to mask the low real volume and/or to convince naive traders that the price was going up.

Robots selling to robots is not "fake volume" if the robots belong to competing traders.

EDIT: 5.000 BTC of MtGox's daily volume

OK, let me try.  Who is going to buy at Overstock using Bitcoin?

• a) Random Joe who has USD but no Bitcoin;
• b) Speculator who is trading in order to get hold of as much Bitcoin as he can;
• c) Speculator who is cashing out and leaving the market;
• d) Believer who is certain that 1 BTC will be worth 10,000 next year.
• e) Speculator who is trying to convince others to buy his bitcoins at higher price.

My guess is

• only a few of (c), namely those who would have bought at Overstock with USD anyway;
• only a few of (d), namely those who are willing to waste a few of their precious Bitcoins for the Good of the Cause;
• perhaps some (e);

but in all three cases the total amount of BTC spent will be small; my guess is a couple thousand BTC at most.  So the good news will flop when it becomes public that only 0.01% of Overstock's turnover is in BTC.  On the other hand, all three cases imply cash will leave the market, driving the price down.

Please read the rest. Obviously average Joe will NOT care about it. Why would someone convert USD to BTC if they can buy with USD directly?

Those are part of (a) or (d) depending on how much faith they have.  The (a)s would have the hassles and losses of converting USD to BTC, a limited choice of merchants, and will have nothing to show for it except the receipt. (A Lamborghini bought through that route looks exactly the same as one bought with USD.)

Those are included (c). (Perhaps I should have said "Miner or Speculator".) 

By the way, spending 1 Bitcoin that is supposed to be worth 10,000 USD next year to buy 900 USD worth of merchandise today is almost a confession that one has lost the Faith.

I am a dinosaur academic type.

I understand enough of the protocol to believe that it is technically sound.  My skepticism is about the economic aspects.

It doesn't bother me that people are speculating (basically, gambling) on a market with very uncertain future -- as long as everybody understands the odds and risks.

It does bother me that Bitcoin is being "sold" by some with rather misleading claims, such as "the supply is limited" (true of Bitcoin, but not of cryptocurrencies in general), "transfers are anonymous", "cannot be stolen or taxed",
 "there are no fees", "banks and governments cannot touch it", etc. 

And it bothers me a lot when speculators turn to Latin America as a promising source of Rich Suckers -- who, they hope, will buy those overpriced Bitcoins that no longer find buyers in China, India, Europe and North America.

Not if I can help it.

I do not see the connection between the two.

Right now in http://bitcoinwisdom.com/markets/huobi/btccny I see about 10 transactions per minute, which would be about 15,000 per day and thus about 3 BTC per transaction on average. 

Are they showing the entire order book, or only the N highest bids and lowest asks?

Is is possible that the exchanges are posting fake orders, that will never get closed with real transactions?

These bogus arguments are still circulating, although the "official bitcoin sources" now seem to avoid them.

Governments can outlaw or regulate Bitcoin as they wish.  Their law enforcement agencies generally have sufficient power and tools to ensure that most citizens will comply with the laws.  See China and India for example.


I cannot recommend to anyone that they invest money in something which, in my opinion, is unlikely to ever be more than a form of gambling.

As for impact, last year we saw in Brazil the collapse of TelexFree, a rather obvious Ponzi schema, and OGX, an oil company which allegedly misled investors about productivity of its wells.  Each involved the transfer of several billion dollars from the pockets of smart people to those of even smarter people. (The TelexFree operators alone pocketed more than half a billion USD; still unclear how much more.)

According to the 1h charts at http://bitcoinwisdom.com/markets/btce/btcusd, the current mini-rally apparently started at

  15:00 on Huobi
  15:00 on BTC-e
  18:00 on MtGox
  20:00 on Bitstamp

all on Jan/10 (UTC).

Huobi's volume usually falls by 90% during the early morning hours local time (which is UTC plus 9 hours, I believe). However that dip was missing on Jan/07 UTC (Jan/08 local), during the crash from ~5600 to ~4700; and just now, on Jan/10 UTC (Jan/11 local), during the ongoing rally.

Perhaps the rally at Huobi is being driven by non-Chinese customers?

What makes you think so?

If it is fake, it is very well done. It even looks more real than the other exchanges...

Bitcoinwisdom has daily data for them since Sep/2013. (It has several years of data for other exchanges.)

I see.  But if the bitcoins actually change hands, then the trades (robot or not) are not fake, and and the price they define is the real price.  Non-zero fees obviously drive speculators away from other exchanges.

If Huobi's daily BTC volume is now really 4x that of Bitstamp, MtGox and BTC-e (as Bitcoinwisdom seems to show) , then they should tend to control the market, with the others following through arbitrage.

I agree with your criticism of exchanges.

However, even if cryptocurrencies succeed, traditional currencies ("fiat") will be around for many decades. Governments will pay salaries, pensions, contracts, treasury bonds with fiat, and will collect taxes in fiat. In some countries (as in China now) merchants must quote prices exclusively in fiat.

While fiat exists, exchanges will be needed so that people who are not financial tycoons can convert fiat money into crypto money and vice-versa.

At first, the BTC/USD rate will be set by speculation on the exchanges, and that rate will determine BTC's purchasing power for goods and services.

If and when commerce shifts substantially to drect cryptocoin payments, things may reverse: the market of real goods and services will eventually define the purchasing power of cryptocoins, and that will determine the fiat/crypto rate at the exchanges.

 

Huobi traders, humans or robots, seem to have gone to bed: hourly volume is down by 90% or more.  As happens almost every day at this time (small morning hours in local time).

By analyzing the transactions in the blockchain and matching them with a detailed table of BTC price over time, is it possible to figure out the amount of BTC that was last bought at a given price?

The goal would be a table saying, for instance

     10,000 BTC were last bought at 1200-1250 USD
       7,000 BTC were last bought at 1150-1250 USD,
           ... 
 5,000,000 BTC were last bought at at 0-50 USD.

Such a table should be useful to speculators, no?

Even for on-book transactions it would be hard to get the exact price.

In all cases one would have to assume the price from some weighted mean of the prices at the main exchanges, at approximately that time (with proper currency/penalty conversion factors, e.g. 1.00 for Bitstamp, 0.90 for MtGox, etc.)

That table will be very crude of course. A statistic per wallet rather than per coin may be more interesting.  That is, for each wallet we keep an "estimated USD balance", and for each transaction of N bitcoins into (or out of) it, we subtract (or add) N*P dollars, where P is the mean BTC/USD rate at the time.  Then we can estimate the average price that was paid for the coins remaining in that wallet.

Doing that for all wallets may be prohibitive, but it would suffice to do it for a large enough sample.

Of course it would not say much about the position of persons, since a person may have many wallets; but even so it would be an interesting statistic.

It seems that tens of thousands of coins were bought by speculators at 1000 USD or more, just before the all-time high, on the assumption that the price would keep rising. Some of those speculators must have grown disenchanted and will dump those coins as soon as the price returns to that level.

On that occasion the volume at the Chinese exchanges increased and easily ate up that barrier.  Before that, the price stagnated for 10-12 days  just below 200 USD.  Would it have broken that barrier without the Chinese?  Who knows...

Volume at the main exchanges on the three days up to the all-time high, namely 27, 28 and 29/nov, when the price was between 950 and 1130 (on Bitstamp; 10% more on MtGox), in kBTC:

BTC-China  80+80+50 =  210
OKCoin     62+55+30 =  147
Huobi      45+37+20 =  102
MtGox      38+37+15 =   90
BTC-e      39+27+13 =   79
Bitstamp   37+22+13 =   72
BitFinEx   9 + 9+ 5 =   23

Other exchanges had smaller amounts.  In total, about 750,000 bitcoins were traded on those exchanges in those three days, when the price was at or above 960 USD and it seemed that it would keep increasing well beyond 1200 USD. 

Presumably some of those coins were traded multiple times in that period, but it seems safe to assume that there must be a few hundred thousand bitcoins out there which were bought at those prices by their current owners.

Do we mean the same thing?

From the 1-day charts at Bitcoinwisdom, bitcoin's October mini-rally first reached ~200 USD briefly on 2013-10-22, then stagnated at or below that level until 2013-11-02, and definitely rose above that level again on 2013-11-03, as the beginning of the big rally.

I could not see clearly which exchange started the rally; on the 1-day charts they all seem to have started together.

It seems  however that the three Chinese exchanges had about 30% of the total volume on 2013-10-22 (the "first time"), and about 50% on 2013-11-03 (the "second time"). 

Typical daily volumes (kBTC) on major exchanges, for the last week or so, from Bitcinwisdom's charts:


Huobi       105
OKCoin       35
BTC-China    11

BTC-e        21
Bitstamp     17
MtGox        16
BitFinEx     16

TOTAL CHINA     151
TOTAL NON-CHINA  70

What we know:

There were two accounts through which one coud put money into Huobi, a personal one that supported ATM deposits and Zhifubao (?) transfers, and a corporate one, on a different bank, that did not. The first way was closed.

We do not know whose decision it was (Lilin's, the bank's, or the central bank).  Nowhere it is said that the second way was explicitly (re)approved by the second bank or by the central bank.

The only certainty is that some ways of moving money into Huobi were closed.  It may be slightly bad news, but it is clearly bad news, not good news. 

The market seems to agree.

(By the way, I believe that OKCoin has been operating all along with their business account only.)

Maybe he typed "buy 860 BTC at 991.7" instead of "buy 860 BTC at 911.7". Oops.

Below is the latest Chartbuddy image of MtGox's order book history for 1 hour, sampled every 10 minutes.  Note the changes along my yellow highlight line.  There seems to be a robot that continuously repositions a sell order of 150-200 BTC at exactly 50 USD above the last transaction price.  What could be the purpose of that robot?

I have made a few (not dozens) of posts about the small "creeping ping-pong" trades on MtGox (which seem to have stopped a while ago). Thanks for your explanations.

This is a different "phenomenon": a much larger order that is being continuously repositioned on the ask side only, apparently without any transaction. Unless there is a sudden increase in price (more than 50 USD in less than 10 minutes), those coins would never be sold. Could it be a safety measure against excessive volatility? A trap for random impulse buyers?

Sorry to repeat, but a transaction can be considered fake only if the same person or organization is selling to himself.

If the two sides are distinct and competing traders, the transaction is legitimate volume, whether it is done manually or through robots.

Is there evidence that truly fake transactions are occurring on Huobi (more than on MtGox or other exchanges)?

Day traders obviously prefer to trade on zero-fee exchanges; that alone seems a good explanantion of why Huobi has such a large volume.

It is actually quite simple: the current market price is a kind of mean of the guesses of all traders about what will be the market price in the future.

Yes, mathematically that would be called a recursive definition with no basis (i.e. without a non-recursive "bottom case").

In the stock market, analysis of a company's business and market provides an estimate of its future profits, and those in turn provide a base value that can be considered the "bottom case" of that recursion.

In the commodity market, predictions of the "destructive" demand for the commodity (by industry and consumers, as opposed to traders) play the same role.

Of course the base value predictions may be quite wrong, and (as in the case of gold and tulips) the speculative value may swamp the base value.

Cryptocurrencies pay no dividends and have no "destructive" demand. So they have no base price to anchor the speculation, even remotely.

That is why their prices are so volatile and unpredictable.

Now it is about 2:00 AM in China; all the Chinese traders (and their robots) must be sleeping, since Huobi's volume is (relatively) almost zero.

We should be able to see now what the price trend would be without China. 

I will be very disappointed, indeed.

As I will be if and when gold reaches 1,000,000 USD/ounce, or Apple stock rises to 1,000,000 USD/share.

I understand that many people like gambling; fine, but I don't. 

I understand that many people are optimistic about the future of Bitcoin; fine, but I am not.

Deflation means change in price, so that is not "base value" but the very unknown variable that the market has to define.

Savings is not "destructive" because the bitcoins saved will be traded again depending on expected price.  Indeed every bitcoin is always someone's "savings" except for an instant while it is being traded.

(Perhaps one may consider that bitcoins are "destroyed" temporariliy while a transaction is awaiting confirmation from the net, if they cannot be traded or used for commerce in that interval.  From that "consumption" and predicted volume of commerce one may be able to compute a "base value" that does not depend on speculation, assuming that Bitcoin will be the only cryptocoin in use.  However, the volume of "consumption" depends on the speed of confimation.  Is that predictable?)

Basically yes. I do not expect to make any great discoveries, but as a computer scientist I am supposed to understand Bitcoin (and have a reasoned opinion about it). 

As I said before, I am satisfied that the technical part is sound, but I still cannot see how it can succeed economically.  I am still trying to understand how the market works (if it does).


Methinks that 1800 dollars is too much money to gamble. (My betting limit is a pizza and a beer, and I have made only three or four such bets in my life.)  I would rather spend that money on tools or other grown-up toys.


That too, I suppose.

I am Brazilian. I will spare you the history of Brazilian inflation, suffices to say that the currency was devaluated by a factor of 2.75 quintillion (2.75 x 10¹⁸) in my lifetime. So I do know something about the world of "fiat". 


Yes, IF I knew at the time that bitcoins were going to appreciate that way, I would certainly have bought them.  Ditto for gold or Apple stock. But with my luck I would probably have invested in Enron or the Madoff fund instead...

But right now Bitcoin does not look like such a good investment, does it?   It may be a gold mine for day traders, but to prosper one must be smarter and quicker than all the other smart guys, which I am not. 

That is one of the things I still don't understand.  Suppose that Bitcoin is used to make payments equivalent to a total of M dollars per day, worldwide.  How does one derive from that number a "base value" (market price apart from speculation) for 1 BTC in dollars?

Since the market price is now largely determined by the combined expectations of all traders, with no clear "base value", is hard to predict which way it will go.  My feeling is that it will not rise much above its all-time high of ~1200 USD.

But of course it is just a feeling, although I believe it is justified by what I understand of economy and politics.

That is the market price (currently ~850 dollars per BTC), including the effect of speculation.  

For example, the base price for steel plate (simplifying a lot) is defined by the price/suply curve of steel plate factories and the price/demand curve of the industries that use steel plate.  That base price may be magnified or reduced by speculative trade, to yield the market price.

For bitcoins, if the price of each BTC is P, then obviously to have M dollars of payments per day one must transfer M/P bitcoins per day.  But that volume will include multiple uses of the same bitcoin in the same day.  It will also include "virtual" uses where payments in BTC are made by transfers between bank-like Bitcoin accounts, with only occasional transactions realized in the blockchain (just as today most dollar payments are made without any transfer ofr paper money).

So, a key unknown parameter is the factor F that relates the total payment volume in BTC (M/P) to the number of distinct bitcoins needed to realize that volume.

Doesn't this equation assume that all payments are made by exchanging the actual currency (banknotes in the case of dollars, blockchain transaction for BTC)?

How does one define V when most dollar payments are made by moving numbers from one bank ledger to another?  Wouldn't the same issue arise with BTC?

(Sorry for the stupid question, but when BTC are traded at an exchange, is each transaction immediately realized on the blockchain, or are transactions tracked in internal accounts, to be combined and realized at a later time?)


Er, sorry again, what is V now for bitcoins? How is it expected to change as PQ increases?

Perhaps the negative piece on China's TV?

More bad press from China. (Note at bottom says it was published in a Chinese newspaper, doesn't say when):
http://www.scmp.com/comment/insight-opinion/article/1404497/bitcoin-bubble-wont-last-without-beijings-approval

The point is that the Chinese press is insisting on the Ponzi aspect.  If that is the government position, Bitcoin trading may become illegal in China.

(Bitcoin may have good intentions, but trading it is a zero-sum game, whether it blooms or collapses.  One man's proft is necessarily another man's loss.)

More recent bad press:

Aussie Mum In Anti-Bitcoin Crusade After Son's Death
http://www.gizmodo.com.au/2014/01/aussie-mum-in-anti-bitcoin-crusade-after-sons-death/

Investors beware of Bitcoin
http://www.livemint.com/Opinion/fEXo8r2OcAIZHWOMbZmmfO/Investors-beware-of-Bitcoin.html

You are welcome. I thought bitcoiners would want to know what the press says, whether they agree with it or not.

For example I believe that the mini(?)crash that is happening now is due to the Chinese TV program, that must have reached - and scared - many people in China.  Arbitrage would explain why the other non-Chinese exchanges are falling too.

One point that struck me in the second article is the comparison of Bitcoin to bearer bonds. They too were once an anonymous international "currency" outside the reach of governments and banks. For that reason (it says) banks have been forbidden to deal with them.

A government's attitude towards cryptocoins presumably depends on their perceived effect on the country's economy - or, rather, what it thinks the economy should be.

Cryptocoins have been used mostly for speculation so far, but are being promoted as a means to move money across national borders, bypassing bank fees and money export regulations.  That may explain why bitcoin became so popular in China, at a time when its price was stagnating on the West.

Most countries do not care for speculation and zero-sum games, even if they ruin some people's lives.  Financial gambling tends to concentrate wealth, and politicians would rather serve one billionaire than 1000 millionaires. Such schemes get banned only when banks or powerful people lose big money with them.

Most governments do care for international money transfers. Countries that are likely to be on the receiving end (such as the US, Singapore, and tax heavens) will probably love cryptocoins, while countries likely to be on the other end (like China, India, and Latin American countries) will want to restrict or ban them, as they do with other payment methods.

I suspect that China is planning to ban cryptocoins, but is doing it slowly so that big investors have the time to sell their coins to smaller fish.  I presume that they would rather deal with 10,000 workers who lost 10,000 USD each than with one tycoon who lost 100 million because of the ban.

 

Very interesting.  Could this be the reason for the alleged difficulty of moving USD out of Mt Gox?

Usually Huobi is nearly dead from 2:00 am to 6:00 am local time  (17:00 to 21:00 UTC).  But today volume increased to daytime leves at 4:15 am (19:15 UTC), and the price jumped up from ~4800 CNY to ~4900 CNY at the same time.  It then jumped again to ~5000 CNY at 5:30 am (20:30 UTC).

I deduce, dear Watson, that this rally was born in the "West" (perhaps at BTC-e) and was then carried to Huobi by arbitrage, or was generated at Huobi by "Western" traders.

EDIT: volume at Huobi was down to sleep metabolism again at 6:am (21:00 UTC). Wops, not really.

Perhaps someone will be interested in this comparison between the prices of MtGOX, Bitstamp, and BTC-China:



I should have used Huobi instead of BTC-China, since the latter appears to be nearly dead now.   However the website where I got the data (http://bitcoincharts.com/charts/) does not work with Huobi.  Is there an alternative source?

I saw several messages claiming that Huobi's volume is "fake", but I have yet to see evidence of that.

Certainly the 0% fee makes it very attractive for day traders, both human and robots.  One would expect a higher volume of legitimate transactions just for that reason (and because China is so big).

As others have noted, "robots are people too". A trasaction by robots or humans is not "fake", unless the two accounts involved belong to the same person.  Is there reason to believe that is happening?

Huobi's volume changes with the hour of the day as expected for a market centered on China's latitude.  In particular, it falls regularly to near zero between 19:00 and 23:00 UTC, which I believe is 04:00 am to 08:00 am in China.  (There are a few days when that pattern was broken, usually during large crashes or rallies.)  Legitimate human or robot speculation is expected to behave like that; but would one think of putting to sleep a robot that is trading with himself only to build up volume?

On the other hand, MtGOX has been caught posting "fake" price data during the Dec/01 crash. It and other exchanges do seem to have robots making tiny transactions in the bid/ask spread, which may add up to a significant fraction of their volume.

Methinks Huobi deserves as much (os as little) trust as the other exchanges...

(I sense a strong dislike in this forum to the idea that Chinese speculators may be dominating the Bitcoin market.  Is that so?)

Quite possibly. But even so it makes sense to know what it is doing...


I have a suggestion for that text: instead of "float" say "exponential format, such as '2.3e-2'".  For many programmers, "2.07" is still a float value.

One of these plots is actual hourly closing price (USD/BTC) from one exchange, the other is a series of fake prices generated by a simple "log-Brownian" model.

Can you tell which is which, without looking at other charts?
If you think you can, what difference do you see?

The red line (Y) is Bitstamp's hourly closing price from 2014-01-05 to 2014-01-13.

The blue line (X) is generated by starting with

  X(0) = 840
  Z(0) = log_10(X(0)),

then, for i = 1,2,...

  Z(i) = Z(i-1) + 0.058*RND(),
  X(i)  = 10^Z(i)

where RND() is a random number with normal distribution, mean 0 and standard deviation 1.

In simple words, the simulated price X(i) increases or decreases at each step by a random percentage, without regard for the past history.

I had to try twice, with different random generator's seeds; on my first attempt the simulated price dropped too low at one point, it would have been a dead giveaway.

Not at all! "Random" means "due to arcane reasons that we mortals are not given to understand". 

Good. Can you tell what looked "wrong" with that one?

Indeed, in other time intervals and other scales it is quite visible that the amplitude of the "random" component (the price changes) varies over a scale of tens of hours, so that there are "steadier days" and "wilder days".  That should account for "clustering of high standard deviation data points".

In that interval, in particular, the red curve has larger deviations in the first half, smaller in the middle (from ~120 to ~150) and then intermediate ones near the end.

However, that effect seems to be rather subtle.  Perhaps it was the non-normal distribution of the changes that made the red curve look different?

It usually does at this time of the day.

[..] from what I understand, the derivative of price does not follow a normal distribution.  There are far too many data points with high standard deviations.  Instead you need a distribution with so-called fat tails.
[/quote]
Yes, that is what I mean.  I will try to make some plots later today.

The poor do not undertand speculative markets and are asily swindled.  If they learn that someone got rich by investing in X, many will sell their houses and sustenance cows to invest in X.  (TelexFree, a recent Brazilian Ponzi scheme, was most popular in the poorest parts of the county. I have seen claims that half the adult population of a state in the deep Amazon invested in it.)

Yes.  Question 1: Why stop at 2017?



Question 2: What will I be able to buy with 10,000,000,000,000,000 dollars in 2024?

 

Indeed, in the 1h charts their volume is very low today, compared to that of the previous 4 days
(which varies with local time in a characteristic way).

It is even lower than the volume on Jan/10, another anomalous day.

The price also has been surprisingly stable for the last two days.  Price stability and low volume, which is cause and which is effect? Or are both effects of some external cause?

Huobi's volume was abnormally low in their morning hours, and price was steady at 5100 BTC since their previous night. Then volume jumped up and price plunged to 4925 (eating a 300 BTC wall @ 5000 in a few seconds).

Levels of Enlightenment for market trading:

  * At Level of Enlightenment Zero, you buy or sell at current price based on what other people tell you.

  * At Level of Enlightenment  One, you draw lines, triangles and dinosaurs over the charts, look for trends and patterns, in an attempt to predict future prices from the set of past prices.

  * At Level of Enlightenment Two, you realize that the market does not give a damn for the past price history.  Any trends are due to the trading community's perception of external events. When the external conditions change (e.g. when the traded item is banned in Mongolia, or featured in a TV serial), the trends immediately change in ways and amounts that are very hard to predict.  The best one can say is that the price P(now + t), in log scale, is P(now) plus a random variable with zero mean whose variance increases linearly with t, irrespective of its past history.

  * At Level of Enlightenment Three you know more complicated formulas that use past prices to give predicitions for future prices that are significantly tighter than those of the Level Two model above. But I haven't got to that Level yet.

I suspect that there is a maximum Level of Enlightenment N-1, after which one's understanding of markets goes back to Level Zero.

Well, it depends on when you start to compute the mean...

Start at 2013-01-01 and the mean of log increments is positive; start at 2013-11-18, and it is zero; start at 2013-11-29, and it is negative. 

If the past is relevant, the recent past (say, the last two months) should have more weight than the remote past, no?  So why is the mean since 2011 more likely to be correct than the mean since 2013-11-29?

But if the mean increment is indeterminate to that degree, it becomes part of the zero-mean random term, just increasing its variance.

That observation is the key to rising from Level One to Level Two.

BTW, even if one starts at 2011, the mean increment per time step is not "strongly" positive: it is still small compared to the standard deviation of the random term.

... and UP ~ 100 CNY/day since 12/17, and DOWN ~ 100 CNY/day since 01/05, and ...

 

Volume of BTC to/from USD and other national currencies, for 2014-01-14 (kBTC):


  Bitstamp   12.3
  BTC-e       9.8
  BitFinEx    7.1
  MtGOX       6.4

  SUBTOTAL   35.6

  Huobi      91.4
  OKCoin     22.2
  BTC-China   5.6

  SUBTOTAL  119.2

  TOTAL     154.8


Numbers collected by hand from the Bitcoinwisdom charts, may be wrong.

The Coinbase volume is not available at Bitcoinwisdom. Other exchanegs seem to have much less than 500 BTC volume each (not included above).

The Huobi volume is somewhat below its daily average; the same may be true for the other exchanges as well.

So that the Bears do not feel slighted by that extrapolation wallpaper:



(At its peak, WorldCom was worth over 100 billion USD. AFAIK it was the largest bankruptcy in US history.)

EDIT: bitcointalk seems to be truncating the image for some reason.  You may get it here:
http://www.ic.unicamp.br/~stolfi/temp/worldcomm-closing-price-log-extrap.png

use "Export" rather than "Save" to save in a format other than .xcf

I wish I was! But no, Gimp is the work of many great Gnu/Linux hackers out there...

According to Wikipedia, in mainland China the 2014 Chinese New Year holidays are 31 January – 6 February
http://en.wikipedia.org/wiki/Chinese_new_year

Could it be be a client with special privileges? Like, someone inside MtGOX and/or Bitstamp?

Arbitrage trading requires the ability to transfer cash or coins quickly between markets. One way, as the poster suggested, is to have a pile of coins and a pile of cash in each exchange. Then one can do instantaneous "virtual transfers" if required by the chosen arbitrage strategy, and do real transfers later, once in a while, only to rebalance the piles.  Does this make sense?

You don't need to actually do the transaction on the blockchain, or wait for confirmation, if the accounts in the two exchanges belong to trusting partners (or to the same person) and the receiving account has enough balance to keep on trading as if the transfer has taken place. 

Just as when you draw $100 cash from an ATM of your bank in Mongolia, you do not have to wait until your cash is physically shipped there from your home country, or even wired to Mongolia through the central banks.  Your bank just moves numbers in its ledgers.

Such transfers can be kept virtual and private as long as the Mongolia branch has (or can borrow) enough cash locally to keep its ATMs stocked, and is confident that the balance of all virtual transfers can be realized eventually.
Your USD withdrawals from MtGOX may take weeks or years, but the exchange owners probably can transfer money from their bank (or take out a suitcase full of cash) in a couple of hours, if they decided to do so.

One must be aware that cryptocoin exchanges are still unregulated, unaudited, and have no ethical standards to uphold.

About the FBI bitcoins:  I live far from the US and have no inside knowledge, but based on my understanding of how governments work, I would guess that:

The people in charge of the sale of those bitcoins do not stand to profit from it (at least legally).

Therefore, they do not particularly care to get the best possible price for them.

Their primary concern is to follow the rules so that they won't be charged with blatant errors, negligence, favoritism, etc.  Selling government property through private deals is highly against the rules, I can't imagine them doing it.

They will not get blamed if the coins are auctioned for $500 and the buyers immediately resell  them for $1000; that sort of thing happens all the time in public auctions.

They will try to avoid obvious mistakes that they can be blamed for (like failing to publicize the auction or doing so with too short notice).  But they will not look for smart trading strategies, like selling litte by little or waiting for the market price to rise.   (For a civil servant, being dumb is OK; trying to be smart and failing is very, very bad.)

They are also not concerned about what the auction could do to the market price.  A speculator's loss is always someone else's profit, so a price crash will only affect the distribution of wealth, not its sum. 

On the other hand, making hoarded goods available for use or consumption is always a good thing for the world as a whole.  (Granted that it may not apply to bitcoins, given that their utility is independent of the quantity in circulation.)

Thus I expect that they will auction the SilkRoad stash in largish lots (just small enough to have competitive auctions), and let the market do whatever it will do.

Volume of BTC trade to/from USD and other national currencies (kBTC):


            01/14  01/15

  Bitstamp   12.3    8.2
  BTC-e       9.8    7.2
  MtGOX       6.4    4.7
  BitFinEx    7.1    3.7
  Bitcoin.DE         0.4
  CaVirtEx           0.3
  Kraken             0.3
  CampBX             0.1
  CryptoTrade        0.0

  SUBTOTAL   35.6   24.9

  Huobi      91.4   70.2
  OKCoin     22.2   24.8
  BTC-China   5.6    3.5

  SUBTOTAL  119.2   98.5

  TOTAL     154.8  123.4


Numbers collected by hand from the Bitcoinwisdom charts and added by hand, may be wrong. 

They do not incluce trade between BTC and other cryptocoins such as LiteCoin.

The Coinbase volume is not available at Bitcoinwisdom.

The Chinese traders and their robots have decided that 1 BTC is worth 4800 CNY, because they have realized that the Chinese traders and their robots have decided that 1 BTC is worth 4800 CNY, because they have realized that the Chinese traders and their robots have decided that 1 BTC is worth 4800 CNY, because they have realized that the Chinese traders and their robots have decided that 1 BTC is worth 4800 CNY, because they have realized that the


(image from http://www.boston.com/bostonglobe/ideas/theword/2009/01/bootstraps_and.html)

The 247 million indonesians probably care.

MtGOX has a lot of transactions of 0.01 BTC that bounce randomly in the gap ("spread") between the lowest ask and the highest bid.  Here is a short sample, copied earlier today from the Bitcoinwisdom page:



The times are UTC.

The blue dots are all the transactions of exactly 0.01 BTC in those ~10 minutes.  There are 155 transactions, or about 15 per minute, adding to 1.55 BTC.  At this rate, they will add up to 216 BTC per day.

The red dots are all the other transactions.  The dot's area (above a certain minumum area) is proportional to the transaction's volume; the total volume is ~18 BTC, largest ones are about 2 BTC each.

I presume that those "ping-pong" transactions are generated by the exchange itself.  I wonder what could be their purpose? To make the spread visible? To avoid empty intervals in the charts?

O Market Pundits: is the volume low because the price is stable, or is the price stable because the volume is low?

I mean in general, there is an obvious correlation between price changes and volume in any market, isn't there?  For example.:



So, which is the chicken, and which is the egg?   

(I supose that for this question one must look at the data from Huobi and OKCoin, since they may have 80% of the total trade volume and appear to be the main price setters.)

Volume of BTC trade to/from USD and other national currencies (kBTC):


  EXCHANGE    !  01/14 !  01/15 !  01/16

  Bitstamp    |  12.27 |   8.22 |  17.11
  BTC-e       |   9.79 |   7.22 |  12.82
  MtGOX       |   7.19 |   5.49 |  11.47
  BitFinEx    |   7.17 |   3.68 |  11.47
  Bitcoin.DE  |   0.51 |   0.38 |   0.61
  CaVirtEx    |   0.45 |   0.26 |   0.31
  Kraken      |   0.35 |   0.29 |   0.68
  CampBX      |   0.16 |   0.12 |   0.16
  CryptoTrade |    .   |    .   |    . 

  SUBTOTAL    |  37.89 |  25.66 |  54.63

  Huobi       |  91.40 |  67.37 |  74.21
  OKCoin      |  22.24 |  24.82 |  32.28
  BTC-China   |   5.58 |   3.54 |   4.55

  SUBTOTAL    | 119.22 |  95.73 | 111.04

  TOTAL       | 157.11 | 121.39 | 165.67
 


Numbers were collected by hand from the Bitcoinwisdom 1-day charts, may be wrong. 

They do not incluce trade between BTC and other cryptocoins such as LiteCoin.

MtGOX volumes in previous posts failed to count BTC/EUR and BTC/GBP trade, they have been corrected now (01/14 6.4 --> 7.19 kBTC, 01/15 4.7 --> 5.49 kBTC).

Huobi's volume for 01/15 was wrong too and has been corrected (70.2 --> 67.37 kBTC).

The Coinbase volume is not available at Bitcoinwisdom.

In terms of daily volume, it seems the Western exchanges have recovered some gounds relative to China.

Or at least they have learned how to fake volume too  .

In the case of traditional corporations, external auditors and government bodies like the US SEC try to ensure that production and sales figures have not been inflated to mislead investors.  Unfortunately there are no controls whatsoever for cryptocoin exchanges (and some insist that any such controls would defeat the purpose of the initiative).

In 2011 I spent many hours typing and plotting the temperature, pressure, and water level data for the Fukushima reactors that were released by TEPCO several times a day.  After a few months TEPCO finally admitted that the fuel had melted its way through the bottom of the reactor vessels, so that those numbers were totally meaningless.

I suspect that I will soon have the same disappointment about the bitcoin market volume data... 

USD or CNY?

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


  EXCHANGE     !  01/15 !  01/16 !  01/17 ! 01/18 ! Currencies considered

  Bitstamp     |  12.27 |   8.22 |  17.11 |  5.49 | USD
  BTC-e        |   9.79 |   7.22 |  12.82 |  7.22 | USD
  MtGOX        |   7.54 |   5.91 |  12.23 |  6.20 | USD, EUR, GBP, AUD, JPY
  BitFinEx     |   7.17 |   3.68 |  11.47 |  3.81 | USD
  Kraken       |   0.35 |   0.29 |   0.68 |  0.28 | EUR
  Bitcoin.DE   |   0.51 |   0.38 |   0.61 |  0.27 | EUR
  CaVirtEx     |   0.45 |   0.26 |   0.31 |  0.01 | CAD
  CampBX       |   0.16 |   0.12 |   0.16 |  0.04 | USD
  Crypto-Trade |    .   |   0.01 |   0.01 |   .   | USD

  SUBTOTAL     |  38.24 |  26.09 |  55.40 | 23.32 |

  Huobi        |  91.40 |  67.37 |  74.21 | 43.60 | CNY
  OKCoin       |  22.24 |  24.82 |  32.28 | 25.31 | CNY
  BTC-China    |   5.58 |   3.54 |   4.55 |  1.77 | CNY

  SUBTOTAL     | 119.22 |  95.73 | 111.04 | 70.68 |

  TOTAL        | 157.46 | 121.82 | 166.44 | 94.00 |



All numbers were collected by hand from the sites http://bitcoinwisdom.com and http://bitcoincharts.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column.  They do not include trade between BTC and other cryptocoins such as LiteCoin.

The MtGOX volume now includes (retroactively), besides the trades to/from USD, also to/from GBP, AUD (both relatively small), EUR, and JPY (around 1 kBTC each).  The JPY volume was obtained from bitcoincharts.com.

The Coinbase volume is not available at Bitcoinwisdom.

Dates on the header line have been corrected so that now they are UTC rather than Brazilian local time (which is what Bitcoinwisdom uses). Specifically, "01/15" now means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". On previous posts the same column was labeled "01/14" meaning "01/14 22:00:00 to 01/15 21:59:59 BRST".

As other have noted, Saturday 01/18 UTC was a slow day: volume down ~35% China, ~50% outside China.

On that day China apparently got ~75% of all the BTC trade volume. BTC-China's share share of it is small and dwindling.

Another random plot:



This plot shows the mean yearly rate of increase for the USD price of 1 BTC at Bitstamp since various past times to the present (specifically, to about jan/17/2014 23:00 UTC).

For example, the graph reads ~1000 around oct/17/2013.  It means that the average price increase from that date to the present is equivalent to 1000-fold (9,990% increase) per year.  More specifically, if we compare the price at that date (138.38 USD) and the price at jan/17/2014 (795.89) and extrapolate that rate of growth to one full year, we would get ~1000 times the starting price -- that is, ~795,000 USD by jan/17/2015.

On the other hand, the graph reads ~0.1 at about nov/30/2013.  It means that between that date and jan/17 the price fell to such an extent (from ~1100 to ~795) that, extrapolated to one year, would give a factor of ~1/10 (a 90% decrease); namely, a prediction of ~79,5 USD/BTC by  jan/17/2015.

If we look instead at the change from ~jan/06 to ~jan/17/2014, we get a factor of ~0.001, that is, a prediction of 0,795 USD/BTC by jan/17/2015

Finally, the graph reads 1 at about nov/24/2013.  It means that the price at that date was the same as it is now, i.e. the rate of (non-)increase since then was 0% per year.

Presently I believe that this sort of analysis is quite useless.  The market does not seem to care for past prices, presumably because experienced traders believe that other experienced traders do not care for them, and so on recursively.  

The graph seems to justify this indifference.  Logically, the price at nov/29 should be more relevant than that of oct/17.  But, depending on the time span considered, the analysis may yield from very positive to very negative predictions.  Which time span is the right one to use?

Huobi's volume is VERY low today (Sunday jan/19 UTC).  Presumably the Chinese New Year holidays have started?

There was no such drop in previous Sundays, nor during the Christmas/Jan 1 holidays. (I suppose that Chinese employees generally don't have weekends off, do they?)

Curiously OKCoin's volume does not seem to be affected by this drop, or by Sundays in general. But it was very low from Fri Dec/20 to Tue Jan/02 UTC, inclusive. 

Both exchanges show reduced activity in the same hour rage every day, from ~17:00 to ~22:00 UTC that corresponds to ~02:00 to ~07:00 am in Beijing, I believe.  However Huobi's volume is VERY low in that interval, while OKCoin only drops by ~50%.

Are those drops due to exchange-specific events (e.g. problems with banks), or to different holidays and work hours by different user populations?

Or are they due to different volume-faking robots?   

I hope everyone noticed the irony in that "petition".


Perhaps because Dogecoin is what Bitcoin should have been?

There are a number of economic reasons that make me skeptical about Bitcoin's chances of success.  But there is one reason that makes me wary of it: the fact that its is being "marketed" more as an investment than a payment system.

Here is what a true Bitcoin believer, pure of heart, should be saying:

  * Our goal is cheap, easy, unrestricted international payments;
  * We will succeed if everybody uses uses crypto, we will fail if no one uses it;
  * Other cryptocoins are welcome and we hope they prosper.
  * Our hope is that SOME crypto will succeed; it doesn't have to be Bitcoin.
  * We do not know how much a Bitcoin will be worth, and it does not matter.
  * However, the value of a cryptocoin should be as stable as the dollar's value is now.
  * The sooner the price stabilizes, the better.
  * Hoarding or speculating with cryptocoins is evil as it defeats those goals.
  * Large cryptocoin-based financial institutions are just as evil as dollar-based ones.
  * Our priority is to convince merchants to accept crypto as payment method.
  * People should change dollars for crypto only if and when it is is clearly worth it.

Instead, here is what Bitcoin enthusiasts seem to be saying, here and in other forums:

  * Our goal is to get rich.
  * We will succeed if Bitcoin's value rises to the Moon, fail if it goes down to cents.
  * Other cryptocoins are unwelcome competition and we must speak out against them.
  * Our hope is that BITCOIN succeeds, we will be mad if some other crypto crushes it.
  * One Bitcoin must be, and surely will be, worth at least 1000 USD.
  * The price should keep rising in the long run so that Bitcoin hoarders can have a steady income.
  * Large price oscillations are good now because one can make money or grab more Bitcoins.
  * Hoarding and speculating with Bitcoins is what the thing is all about.
  * Large cryptocoin-based institutions are welcome because they will want to push the price up.
  * Our priority is to convince everybody to change all their dollars for Bitcoins and hold them fast.
  * People should pay for things and services with Bitcoins even if it is not worth it.

That unfortunatey is the mindset that fuels bubbles and Ponzi schemes... 

Sorry for not being clear. "Worth it" means "you need to pay for something, and using bitcoin is cheaper/faster/safer than any other method."  Not as speculative investment.


Perhaps Dogecoin is (or will be) spoiled by speculators too, but I have seen "official" sites that explicitly discourage hoarding.  My feeling is that the Dogecoin community is nowere as obsessed about price as bitcoiners seem to be.

Please note: the second set of statements is not what I think of bitcoin, but what I understand that many bitcoiners think of it.

Glad to know that there still are bitcoiners who are true and pure of heart. 

This thread (Wall Observer...) has now 82265 messages.  Is there any other thread with 1/10 of this volume?

Clearly this thread is THE bitcoin forum.  All the other threads are just footnotes. 

I understand that eBay will allow buy/sell cryptocoins ads, but will not use Bitcoin themselves.

How much will it cost to place an ad in that section?

That Classified Ads section will probably be a very slow and very inefficient cryptocoin exchange.  

Is there trade in other commodities going through eBay?

[edited for typos]

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


  EXCHANGE     !  01/15 !  01/16 !  01/17 ! 01/18 !  01/19 ! Currencies considered

  BTC-e        |   9.79 |   7.22 |  12.82 |  7.22 |   8.16 | USD                 
  MtGOX        |   7.54 |   5.91 |  12.23 |  6.20 |   8.49 | USD,EUR,GBP,AUD,JPY 
  Bitstamp     |  12.27 |   8.22 |  17.11 |  5.49 |   8.42 | USD                 
  BitFinEx     |   7.17 |   3.68 |  11.47 |  3.81 |   6.63 | USD                 
  Kraken       |   0.35 |   0.29 |   0.68 |  0.28 |   0.33 | EUR                 
  Bitcoin.DE   |   0.51 |   0.38 |   0.61 |  0.27 |   0.23 | EUR                 
  CampBX       |   0.16 |   0.12 |   0.16 |  0.04 |   0.04 | USD                 
  CaVirtEx     |   0.45 |   0.26 |   0.31 |  0.01 |   0.09 | CAD                 
  Crypto-Trade |    .   |   0.01 |   0.01 |   .   |    .   | USD                 

  SUBTOTAL     |  38.24 |  26.09 |  55.40 | 23.32 |  32.39 |                     

  Huobi        |  91.40 |  67.37 |  74.21 | 43.60 |  67.27 | CNY                 
  OKCoin       |  22.24 |  24.82 |  32.28 | 25.31 |  24.52 | CNY                 
  BTC-China    |   5.58 |   3.54 |   4.55 |  1.77 |   4.05 | CNY                 

  SUBTOTAL     | 119.22 |  95.73 | 111.04 | 70.68 |  95.84 |                     

  TOTAL        | 157.46 | 121.82 | 166.44 | 94.00 | 128.23 |                     



All numbers were collected by hand from the sites http://bitcoinwisdom.com, except the JPY volume for MtGOX that was obtained from http://bitcoincharts.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column.  They do not include trade between BTC and other cryptocoins such as LiteCoin.

The Coinbase volume is not available at Bitcoinwisdom.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

Recall that Huobi's volume was lower than usual on the previous day (Sat jan/18 UTC).  Sunday morning (China time) it was even lower, but there was an intense surge in the afternoon, when the price jumped from ~4850 to ~5050 and then stayed there until bedtime.  In the end, Sunday's total volume was typical of last week, only a bit lower than Friday's.

Sunday was mostly like any other day at OKCoin, both in total volume and in the distribution along the day.

Sunday's volume was typical also at the exchanges outside China. (Saturday's was typical too; Friday's was exceptionally high.)

With these changes, China is back to ~70% of the total BTC/"fiat" trade volume (at least for the exchange/currency pairs that I have been monitoring).

No one asked but here is my uber bearish version again anyway:
http://www.ic.unicamp.br/~stolfi/temp/worldcomm-closing-price-log-extrap.png
 

I conjecture that the people trading at Huobi tend to be bullish in the morning and bearish in the afternoon, local time (noting that on this Sunday the morning happened after noon  ).

I could check this conjecture if I had 1-h trade data for the last couple of months or so... 

(Why doen't bitcoincharts.com list Huobi and OKCoin?)

Yes, that is what I usually watch.  But it doesn't have a text download option (does it?).  Bitcoinchart does.

Weird. At MtGOX there are zillions of rearrangements of the order book per minute, but NO trades for several minutes on end. 

Why not thru 2024?
https://bitcointalk.org/index.php?topic=178336.msg4537358#msg4537358
 

Does this have any relation with MtGOX's withdrawal delays?
http://www.theverge.com/2013/8/23/4651926/us-government-seized-5-million-from-bitcoin-behemoth-mt-gox

Is it confirmed that JPY withdrawals work?  What prevents one from withdrawing in JPY and then converting to USD by other channels?

This article about the Bitcoins Savings and Trust scam is old news (July 2013)

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539730583#.Ut3d3ihCYtU

but I wonder what happened to the 150,000 BTC Shavers allegedly stole from customers.  Apparently he had sold at least 80,000 before being caught.  What about the rest? Lost in day trading?

According to my Seventh Level Trend Analysis™



the price of Bitcoin has now hit a Chandrasekhar-Schwartzschild-Walsoraj inversion discontinuity.

From now on it should start oscillating again, with ever increasing swings --- but with reversed polarity.  Price will crash upwards whenever the market gets bullish on bad news, and rally downwards when it gets bearish on good news.

Traders are advised to adjust their basic strategy accordingly: from now on, it's "buy high, sell low".

From what I have read here, BTC-China decided to play it safe, and stopped accepting cash deposits. They now use vouchers that one can buy at e-commerce sites -- a system which is very cumbersome at least.

Huobi and OKCoin still accept cash deposits through commercial bank accounts.  I have read here that the owners are related to powerful politicians; if true, that may explain why they have chosen to run this risk.  I have seen no reports of problems with withdrawals, but presumaby they must be in CNY only.


Why people keep saying that of the Chinese exchanges, but not of the others?  There seems to be no evidence for that claim other than their huge volume -- which is quite expected.  Sure, there is a lot of robot trade, and zero fees encourage it; but robot trade is not necessarily fake.

On the other hand,  the 1-minute charts at MtGOX and now even BTC-e seem rather peculiar. 

Exchanges that are small and/or shrinking have obvious interest in padding their volume numbers with fake trades; and being unregulated have no reason to avoid the practice.  Note that an exchange that has  transaction fees for ordinary clients may forfeit them for special friends -- such as themselves.

For one thing, all the tiny trades that bounce up and down between the lowest ask and the highest bid,  Sometimes many times per minute, sometimes once every couple of minutes.  Without them, the chart would probably look like Huobi's, only much sparser.

My impression of MtGOX is that all the sellers are over-bullish and all the buyers are over-bearish, so they just sit there facing each other, for hours on end,  with a $20 gap between them.  (I suppose that the technical term for that is "low liquidity", correct?)  Occasionally a newbie or arbitrage trader comes in determined to trade a dozen coins.  More rarely, the price in China changes so much that everybory who is sitting on MtGOX's book has to pick up their chair and move it over a bit.

# Last edited on 2014-01-21 13:39:26 by stolfilocal

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Wed !    Thu !    Fri !   Sat !    Sun !    Mon !                     
  EXCHANGE     !  01/15 !  01/16 !  01/17 ! 01/18 !  01/19 !  01/20 ! Currencies considered

  MtGOX        |   7.54 |   5.91 |  12.23 |  6.20 |   8.49 |  12.10 | USD,EUR,GBP,AUD,JPY  
  BTC-e        |   9.79 |   7.22 |  12.82 |  7.22 |   8.16 |  10.01 | USD                  
  Bitstamp     |  12.27 |   8.22 |  17.11 |  5.49 |   8.42 |   6.97 | USD                  
  BitFinEx     |   7.17 |   3.68 |  11.47 |  3.81 |   6.63 |   5.46 | USD                  
  Bitcoin.DE   |   0.51 |   0.38 |   0.61 |  0.27 |   0.23 |   0.39 | EUR                  
  CaVirtEx     |   0.45 |   0.26 |   0.31 |  0.01 |   0.09 |   0.22 | CAD                  
  Kraken       |   0.35 |   0.29 |   0.68 |  0.28 |   0.33 |   0.19 | EUR                  
  CampBX       |   0.16 |   0.12 |   0.16 |  0.04 |   0.04 |   0.10 | USD                  
  Crypto-Trade |    .   |   0.01 |   0.01 |   .   |    .   |   0.01 | USD                  

  SUBTOTAL     |  38.24 |  26.09 |  55.40 | 23.32 |  32.39 |  35.45 |                      

  Huobi        |  91.40 |  67.37 |  74.21 | 43.60 |  67.27 |  71.78 | CNY                  
  OKCoin       |  22.24 |  24.82 |  32.28 | 25.31 |  24.52 |  21.00 | CNY                  
  BTC-China    |   5.58 |   3.54 |   4.55 |  1.77 |   4.05 |   3.44 | CNY                  

  SUBTOTAL     | 119.22 |  95.73 | 111.04 | 70.68 |  95.84 |  96.22 |                      

  TOTAL        | 157.46 | 121.82 | 166.44 | 94.00 | 128.23 | 131.67 |                      



All numbers were collected by hand from the site http://bitcoinwisdom.com, except the JPY volume for MtGOX that was obtained from http://bitcoincharts.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column.  They do not include trade between BTC and other cryptocoins such as LiteCoin.

The Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

[EDIT: added week day header.]

Speaking of which, I was touristing in NY over the year-end holidays (yes, it was cold). We went to see Wall Street one evening, and was surprised to see a "Bitcoin Information Center" right next door to NYSE.  Behind a small lounge one could see a room where someone was presenting a talk to a small audience.

My sons, who knew of my obsession strong scientific interest in the matter, urged me to go in and pretend I was some rich sucker would-be investor. While we were at it, a fellow came out and invited us inside, saying something about something being already up to some zillions of dollars.  But I was too tired and thinking only of getting back to my hotel.

The rent for that place must be a small fortune.  That's one thing that I find off-putting about Bitcoin: too much lavish marketing for a project by a bunch of young digital subversives whose goal is to steal a highly lucrative business from banks and undermine the governments' control of money flow, worldwide.

Too much effort in convincing people to invest in Bitcoin, rather than to use it.

"Look at how many millions you could make by investing  bitcoins" instead of

"Look at how many cents you could save by buying a toaster with bitcoins instead of a credit card."

A sure sign that an investment is a scam is when its TV ad shows a smug man on a luxury boat with three girls on each side.  Renting a storefront next to NYSE is not as bad, but is going in that direction, IMHO.

Lots of nice predictions, we will see if they materialize.  (By the way, CNN blogs are not very selective on what theiy publish, it seems.  The author does not seem to be affiliated with CNN.  Is that a reader-contributed article?)

The title of that article is rather funny though.  Does the author realize that Napster was originally a pirate site that threatened to bypass the copyright industry's monopoly market, was crushed for that, then assimilated by that industry? 

If we take that title literally, Bitcoin will be appropriated by the banks, and turned into a fancy brand for something entirely different from the dream of its inventors.

Napster and other pirate music sites had perhaps the merit of forcing the music industry to accept the internet as a delivery channel (instead of physical records) and reduce their prices from absurd to merely exaggerated.  (But  the merit for that goes to Apple, whoc ould not simply be crushed like Napster was.)

I do hope that cryptocoins will at least have the same effect on the cost and delay of international money transfers.  Beyond that -- well, I am still not convinced.

Sorry I wasn't clear: I haven't seen such ads for Bitcoin yet (except here in this thread 8-).


It is hard to answer, since I am still skeptical about the chances of success - for cryptocoins in general, and for Bitcoin in particular.

One essential thing that cannot do harm is to convince more merchants to accept international payments in cryptocoins.  (I do not see any advantage for domestic payments, except perhaps for very small amounts.)

However that will require efficient, reliable and trustworthy exchanges.  It is not helpful if a merchant has to wait 3 months to get the money out of MtGOX, ou get his bitcoins snatched by the FBI.  That in turn will require regulation by the local governments, disclosure and independent auditing, just as in stock markets.

Beware that credit card charges are usually a small part of the extra cost of international purchases.  The main item, at least here in Brazil, are the customs taxes (like 40% or more depending on the item).  Not to mention the delay and hassle of having to fetch the merchandise through customs, warranty limitations, risk of item being stolen, etc..  For these reasons, I suspect that most people will continue buying imported goods in the domestic market, rather than make direct purchases.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Wed !    Thu !    Fri !   Sat !    Sun !    Mon !   Tue !
  EXCHANGE     !  01/15 !  01/16 !  01/17 ! 01/18 !  01/19 !  01/20 ! 01/21 ! Currencies considered

  MtGOX        |   7.54 |   5.91 |  12.23 |  6.20 |   8.49 |  12.10 |  7.25 | USD,EUR,GBP,AUD,JPY
  Bitstamp     |  12.27 |   8.22 |  17.11 |  5.49 |   8.42 |   6.97 |  7.67 | USD
  BTC-e        |   9.79 |   7.22 |  12.82 |  7.22 |   8.16 |  10.01 |  5.40 | USD
  BitFinEx     |   7.17 |   3.68 |  11.47 |  3.81 |   6.63 |   5.46 |  2.89 | USD
  Bitcoin.DE   |   0.51 |   0.38 |   0.61 |  0.27 |   0.23 |   0.39 |  0.45 | EUR
  Kraken       |   0.35 |   0.29 |   0.68 |  0.28 |   0.33 |   0.19 |  0.24 | EUR
  CaVirtEx     |   0.45 |   0.26 |   0.31 |  0.01 |   0.09 |   0.22 |  0.23 | CAD
  CampBX       |   0.16 |   0.12 |   0.16 |  0.04 |   0.04 |   0.10 |  0.09 | USD
  Crypto-Trade |    .   |   0.01 |   0.01 |   .   |    .   |   0.01 |  0.01 | USD

  SUBTOTAL     |  38.24 |  26.09 |  55.40 | 23.32 |  32.39 |  35.45 | 24.23 |

  Huobi        |  91.40 |  67.37 |  74.21 | 43.60 |  67.27 |  71.78 | 40.55 | CNY
  OKCoin       |  22.24 |  24.82 |  32.28 | 25.31 |  24.52 |  21.00 | 17.31 | CNY
  BTC-China    |   5.58 |   3.54 |   4.55 |  1.77 |   4.05 |   3.44 |  2.07 | CNY

  SUBTOTAL     | 119.22 |  95.73 | 111.04 | 70.68 |  95.84 |  96.22 | 59.93 |

  TOTAL        | 157.46 | 121.82 | 166.44 | 94.00 | 128.23 | 131.67 | 84.16 |



All numbers were collected by hand from the site http://bitcoinwisdom.com, except the JPY volume for MtGOX that was obtained from http://bitcoincharts.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column.  They do not include trade between BTC and other cryptocoins such as LiteCoin.

The Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

Volume on Tue Jan/21 UTC was quite a bit lower than on Mon Jan/20 at most exchanges, especially on Huobi (41 kBTC against 72).  China's share srunk a bit but is still ~71%.

Today (Wed Jan/21) the volume at Huobi between 09:00 and 10:00 local time was quite a bit lower then usual, it looks like a Sunday.  Is that because of the Chinese New Year holidays?


               !    Wed !    Thu !    Fri !    Sat !    Sun !    Mon !    Tue !    Wed
               !  01/15 !  01/16 !  01/17 !  01/18 !  01/19 !  01/20 !  01/21 !  01/22
Day total      |  91.40 |  67.37 |  74.21 |  43.60 |  67.27 |  71.78 |  40.55 |   ??
09:00-09:59    |   1.61 |   1.29 |   3.22 |   2.59 |   0.48 |   4.69 |   1.28 |   0.63

This plot shows a samples of the transaction logs from MtGOX and Bitstamp, around 2014-01-22 01:00 UTC:



The data was obtained from Bitcoinwisdom's charts by cut-and-paste and an ad-hoc reformatting script.  Beware of errors.

Note that MtGOX prices were scaled down to bring them closer to the Bitstamp prices.

Each dot is a trnsaction; the dot's area is proportional to the volume (except for the smallest transactions, which are shown with a fixed dot size).

It seems that the significant transactions at MtGOX always occur at the upper end of the spread, while the reverse is generally true for Bitstamp.  Does that mean something?

Well, it seems that most people out there have not heard of the complaints about MtGOX, and still think of it as "the" Bitcoin exchange. A collapse would be featured on TV and newspapers, and probably scare some investors away.

By the way, MtGOX must be very attractive for the newbies who have BTC to sell and are looking for the best price, but do not know of its withdrawal problems.  The Bitcoin community should put pressure on MtGOX to clearly and truthfully warn its clients of the withdrawal delays, and/or spread the word around.

Large buys at the upper end of the spread suggest people desperate to buy, rather than to sell.

Perhaps there are many MtGOX clients, with lots of USD in their accounts, who either have urgent bills to pay, or are increasingly worried that they may never get any money out.  Such clients would be willing to buy BTCs at the inflated MtGOX price so that they can sell them in some other exchange.  Does this make sense?

Of course there may be other explanations, including complicated manipulations, fake transactions, insider trading, etc. etc.

I bet that they are making a lot more money now.

Exchanges generally earn more when there is more USD volume.  Falling prices may create a momentary surge in volume, but smaller income in the end.

Bitcoin exchanges are unusual among stock/commodity markets because they basically trade only one item. Unlike NYSE or CME, their future is tightly bound to the future of that item.

That is what I meant for "more USD volume".  Bitstamp's USD volume today seems to be at least 5x what it was in Oct/2013.

Another article with more links:
http://msn.foxsports.com/buzzer/story/daily-buzz-sacramento-kings-bitcoin-peyton-manning-bill-belichick-paul-mccartney-sam-gardner-011614

It seems that they too are receiving payments in USD, through BitPay; not directly in bitcoins.

Huobi's volume so far looks like a replay of last Sunday morning, and the price curve looks similar too. Their clients then woke up late with a bad hangover, but got really wild in the afternoon.  If the replay continues through the afternoon, there will be another rally to ~5200 CNY.

If it doesn't, who knows.

My guess is that it is someone with a large amount of USD in a MtGOX account who has decided to move it out even if it means a 15% loss.  It would make sense for him to buy a little at a time (so as to avoid trigering a rally) and pause whenever the penalty becomes too big.

Well, Huobi's Wednesday was not a replay of last Sunday after all.  Volume increased only a little bit in the afternon, and price dropped ~40 CNY instead of jumping up by ~180 CNY.

They must have had a hell of party on Tuesday night... 

(Seriously though: anyone would dare guess how Huobi's clients access the internet?  By smartphone, PC at home, PC at work, at cybercafes, ...?)

In case anyone cares, here is a plot of the transaction logs for some exchanges, for about 40 min around 19:00 UTC today:



Note that MtGOX prices were reduced arbitrarily by 11% for plot scaling reasons.  The CNY/USD conversion rate (6:1) was picked arbitrarily too.

Transactions per minute in that interval:   OKCoin 4.56, BTC-e 3.47, Bitstamp 2.24, Huobi 1.92, MtGOX 0.94.

Mean transaction volume (BTC) in that interval: MtGOX 2.07, Bitstamp 1.79, Huobi 1.09, OKCoin 0.77, BTC-e 0.45

This article by Mark Andreessen

http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/

claims that Bitcoins cannot be stolen.  But of course they can, if people keep the keys in an easily hackeable computer or smartphone (which increasingly means "any computer"), or hand over their bitcoins to exchanges.  (How can he say that that after the SheepMarketplace incident?)

In a sense, it is your computer, not you, who owns "your" bitcoins; and if Apple or the NSA or the Russian mafia control your computer, they will control your bitcoins too.

Indeed stealing Bitcoins is easier and "safer" than stealing credit cards, because a virus can spend your bitcoins as soon as it infects your computer, whereas cashing out from a stolen card usually implies human intervention, delays, checks, etc.

As others have pointed out, the Chinese New Year holidays last a couple of weeks, and presumably have started already.

Indeed he was referring only to stealing your bitcoins by hacking into the merchant.  But what will the common reader understand when he reads "organized crime is unhappy", "consumers bear no risk of loss, fraud or identity theft"? 

Why did he not point out that bitcoins have other serious risks that credit card users will not expect? Fine to bring up the Target case, but should he not mention SheepMarketplace too?

In order to use your bitcoins, at some point the key have to be entered into a computer... 

I believe I know enough about the positive arguments, and in general I do not dispute them.

Unfortunately there are negative or highly uncertain arguments and I have still to see good answers to them. "Selling" articles like Mark's generally avoid them.

The risk of bitcoins being stolen (possibly en masse) by hackers is an example. 

Bitcoin is only one cryptocoin.  Why should it be the one to survive?

Non-cancellation may be good for merchants (especially dishonest ones) but is bad for customers. 

Governments can ban, restrict, or heavily tax cryptocoins if it suits them.

What will prevent banks and Wall Street from taking control of Bitcoin?

How could the value of a bitcoin be stabilized enough for merchants who thrive on 2% profit?

And so on...

For many years to come, people will have to depend on exchanges and bicoin-based processors to use bitcoin. 

SheepMarketplace is not a risk anymore, it is a fact. A risk is something that could happen; Sheepmarketplace showed the risk of dealing with any exchange.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Wed !    Thu !    Fri !   Sat !    Sun !    Mon !   Tue !   Wed !                     
  EXCHANGE     !  01/15 !  01/16 !  01/17 ! 01/18 !  01/19 !  01/20 ! 01/21 ! 01/22 ! Currencies considered

  Bitstamp     |  12.27 |   8.22 |  17.11 |  5.49 |   8.42 |   6.97 |  7.67 |  8.31 | USD                 
  BTC-e        |  10.24 |   7.59 |  13.51 |  7.46 |   8.48 |  10.29 |  5.67 |  7.44 | USD,EUR,RUR         
  MtGOX        |   7.54 |   5.91 |  12.23 |  6.20 |   8.49 |  12.10 |  7.25 |  5.51 | USD,EUR,GBP,AUD,JPY 
  BitFinEx     |   7.17 |   3.68 |  11.47 |  3.81 |   6.63 |   5.46 |  2.89 |  2.97 | USD                 
  Bitcoin.DE   |   0.51 |   0.38 |   0.61 |  0.27 |   0.23 |   0.39 |  0.45 |  0.69 | EUR                 
  Kraken       |   0.35 |   0.29 |   0.68 |  0.28 |   0.33 |   0.19 |  0.24 |  0.25 | EUR                 
  CaVirtEx     |   0.45 |   0.26 |   0.31 |  0.01 |   0.09 |   0.22 |  0.23 |  0.15 | CAD                 
  CampBX       |   0.16 |   0.12 |   0.16 |  0.04 |   0.04 |   0.10 |  0.09 |  0.05 | USD                 
  Crypto-Trade |    .   |   0.01 |   0.01 |   .   |    .   |   0.01 |  0.01 |   .   | USD                 

  SUBTOTAL     |  38.69 |  26.46 |  56.09 | 23.56 |  32.71 |  35.73 | 24.50 | 25.37 |                     

  Huobi        |  91.40 |  67.37 |  74.21 | 43.60 |  67.27 |  71.78 | 40.55 | 25.81 | CNY                 
  OKCoin       |  22.24 |  24.82 |  32.28 | 25.31 |  24.52 |  21.00 | 17.31 | 15.88 | CNY                 
  BTC-China    |   5.58 |   3.54 |   4.55 |  1.77 |   4.05 |   3.44 |  2.07 |  1.62 | CNY                 

  SUBTOTAL     | 119.22 |  95.73 | 111.04 | 70.68 |  95.84 |  96.22 | 59.93 | 43.31 |                     

  TOTAL        | 157.91 | 122.19 | 167.13 | 94.24 | 128.55 | 131.95 | 84.43 | 68.68 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. The BTC-e volumes now include retroactively also exchanges to EUR and RUR (together about 1 kBTC/day or less).  Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

The Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

The MtGOX price in JPY is now 96939 ¥. which at the current official exchange rate (104.41) is 928.45 USD.

So MtGOX's price seems exaggerated even when exchanging to/from JPY.

Any theory for the discrepancy should work for both currencies.

Are there any reports of delays for JPY withdrawals?

Huobi's traffic at this time of day is usually very small (~0.5 kBTC/hour or less) , even on Saturdays.

Perhaps the volume we are seeing now (~1.2 kBTC/h) comes from outside China?  Peraphs its clients were kept awake by the price swings?  Perhaps something else?

Perhaps there are many Chinese traders who do not believe that jan/31 would be the end, or that it would affect them.

There are however many people who bought bitcoins at or above 5000 CNY / 900 USD, who presumably will risk waiting a few more days for the price to go up rather than sell now at a substantial loss.

If people can withdraw USD from MtGOX, then what is maintaining the 20% spread between them and all other exchanges?  Arbitrage traders should be hogging the place...

Well, is this true or not? Most messages on that issue are very negative, eg. in these threads
https://bitcointalk.org/index.php?topic=430833.msg4743147#msg4743147
https://bitcointalk.org/index.php?topic=432477.msg4742920#msg4742920

However there are occasional reports of successful withdrawals.  Which ones should be believed?

If MtGOX does not warn clients upfront about the withdrawal problems, they are effectively a trap for unwary bitcoin owners (e.g. small merchants) who are looking for a place to sell their BTC.  

It may take months for those newbies to realize what is happening.  Meanwhile MtGOX gets to keep (and play with) their bitcoins and their dollars.

Just like the Evil Banks do.

The CEO of MtGOX is one of the board members of the Bitcoin Foundation...

So who is going to warn the world to stay away from MtGOX?

There are 10 kinds of people: those who use base 10, those who use base 10, those who use base 10, and those who use base 10.

Does anyone know how bitcoin investment is being promoted in China? Are there TV ads?

(I ask because there was a surge of trade volume and price at Huobi after 23:00 local time, when volume usually starts to decrease.)

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Thu !    Fri !   Sat !    Sun !    Mon !   Tue !   Wed !   Thu !    Fri !    Sat !                     
  EXCHANGE     !  01/16 !  01/17 ! 01/18 !  01/19 !  01/20 ! 01/21 ! 01/22 ! 01/23 !  01/24 !  01/25 ! Currencies considered

  BTC-e        |   7.59 |  13.51 |  7.46 |   8.48 |  10.29 |  5.67 | 22.32 |  8.53 |  15.27 |   9.34 | USD,EUR,RUR         
  MtGOX        |   5.91 |  12.23 |  6.20 |   8.49 |  12.10 |  7.25 |  5.51 |  2.23 |   7.38 |   9.52 | USD,EUR,GBP,AUD,JPY 
  Bitstamp     |   8.22 |  17.11 |  5.49 |   8.42 |   6.97 |  7.67 |  8.31 |  7.40 |  15.78 |   8.70 | USD                 

  BitFinEx     |   3.68 |  11.47 |  3.81 |   6.63 |   5.46 |  2.89 |  2.97 |  2.83 |  10.99 |   4.62 | USD                 
  Bitcoin.DE   |   0.38 |   0.61 |  0.27 |   0.23 |   0.39 |  0.45 |  0.69 |  0.42 |   0.52 |   0.30 | EUR                 
  Kraken       |   0.29 |   0.68 |  0.28 |   0.33 |   0.19 |  0.24 |  0.25 |  0.19 |   0.46 |   0.19 | EUR                 
  CaVirtEx     |   0.26 |   0.31 |  0.01 |   0.09 |   0.22 |  0.23 |  0.15 |  0.17 |   0.41 |   0.33 | CAD                 
  CampBX       |   0.12 |   0.16 |  0.04 |   0.04 |   0.10 |  0.09 |  0.05 |  0.08 |   0.13 |   0.04 | USD                 
  Crypto-Trade |   0.01 |   0.01 |   .   |    .   |   0.01 |  0.01 |   .   |  0.01 |   0.01 |    .   | USD                 

  SUBTOTAL     |  26.46 |  56.09 | 23.56 |  32.71 |  35.73 | 24.50 | 40.25 | 21.86 |  50.95 |  33.04 |                     

  Huobi        |  67.37 |  74.21 | 43.60 |  67.27 |  71.78 | 40.55 | 25.81 | 25.67 |  89.25 |  58.16 | CNY                 
  OKCoin       |  24.82 |  32.28 | 25.31 |  24.52 |  21.00 | 17.31 | 15.88 | 16.50 |  34.01 |  26.33 | CNY                 
  BTC-China    |   3.54 |   4.55 |  1.77 |   4.05 |   3.44 |  2.07 |  1.62 |  2.01 |   6.82 |   3.04 | CNY                 

  SUBTOTAL     |  95.73 | 111.04 | 70.68 |  95.84 |  96.22 | 59.93 | 43.31 | 44.18 | 130.08 |  87.53 |                     

  TOTAL        | 122.19 | 167.13 | 94.24 | 128.55 | 131.95 | 84.43 | 83.56 | 66.04 | 181.03 | 120.57 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. The BTC-e volumes now include retroactively also exchanges to EUR and RUR (together about 1 kBTC/day or less).  Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

The Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

Thanks!

Picking a nit on a presumed half-joke: you may make friends among the SI (metric system) guardians if you spell the unit names in lower case: "gavin", "satoshi", etc.  Compare with "watt", "tesla", "farad" (rather than "Watt", "Tesla", "Faraday"). 

The symbol may be an uppercase letter, possibly followed by a lowercase letter, eg. "Gv" for "gavin" (compare "Hz" for "hertz"); but avoid combinations that may be confused with prefix+lowercase unit symbol, like "Gm" for "gigameter" or "Mb" for "megabit".

 

This is one of the first articles found by Google:

http://www.theverge.com/2013/8/23/4651926/us-government-seized-5-million-from-bitcoin-behemoth-mt-gox

Probably there are better and more complete accounts out there somewhere.

If this happens to a well-established British bank

http://en.wikipedia.org/wiki/Barings_Bank#1995_collapse

why would it not happen in an unregulated, unaudited exchange?

Watching the charts is like watching the waves on the beach, waiting for the one that will flood that castle up on the hill. 

Or the one that will recede far enough to empty the ocean.

They don't make crashes like they used to, with the price in free fall leaving behind a single, clean long bloody red trail.  Now the crashes ooze down little by little, hesitatingly, and often turn awry lose the name of Action.

I suppose that it is arbitrage that made the market more viscous, and turned those moments of sheer panic into lazy afternoons of vague uneasiness...

This mini-crash at Huobi (now over?) started at 19:40 China time.  Some bad news showed on TV perhaps?

Western Bitcoin traders should find a reliable news source in China to make sense of what is the largest and most influential market by far.  While arbitrage trading tends to slow down crashes and rallies at the leading market, will quickly "export" them to other markets.

Um, he is not just owner of an exchange, but a founding member of the Bitcoin Foundation? and Marc Karpeles is another? 

Whatever one thinks about the morality or legality of the arrest, I expect it will be very bad for Bitcoin's image.  Many common people will probably stay away from any X when they learn that a top honcho of the  "X Foundation" was charged with criminal use of X.

Sure, other shady exchanges got busted, and their operators were arrested or on the run. 

But so far the discourse was "those are peripheral incidents by outsiders, the core of the bitcoin movement is a bunch of honest people who are working within the law for the good of mankind." 

It will be rather difficult to say that after this arrest, no?  Who is the core of the Bitcoin movement, if it is not the Foundation?

There may be substantial tolerance for drug use in the US, but I don't think that it extends to drug  traffickers -- that is how the FBI is describing Shrem.

Can we conclude that this sudden crash to ~750 in the Western exchanges was due to the news of Shrem's arrest?

Huobi was in the middle of a downtrend with occasional hiccups, but clearly it did not start that crash; and it reacted only slightly to it, presumably because of arbitrage trading.

It will be some time before the news of Shrem's arrest are translated and reported in Chinese media -- if they are at all.  Until this morning I had never heard of the guy, and presumably he and the Bitcoin Foundation are totally unnown in China. So perhaps the Chinese markets will just ignore the incident.

From what I can understand of the Google translation they did not quite ban it, but declared it illegal for use as currency (like China did), forbade banks to handle it (like China did, and banks in most other countries prudently refrained on their own), warned citizens of its high investment risk, and finally scared everybody with "you may find yourself involved in nasty crimes if you try to work with it".   

Was Shrem's arrest mentioned in TV news yet?

It may be wiser to start an independent entity with a completey different set of people.  The other Foundation board members presumably were brought together by Shrem, were his friends, or brought him in; how can they dissociate the Foundation from him?

In any case, methinks that Bitcoin would need some international Users Association with no exchange members in its board, to set standards for exchanges and rate them for compliance.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Fri !   Sat !    Sun !    Mon !   Tue !   Wed !   Thu !    Fri !    Sat !    Sun !
  EXCHANGE     !  01/17 ! 01/18 !  01/19 !  01/20 ! 01/21 ! 01/22 ! 01/23 !  01/24 !  01/25 !  01/26 ! Currencies considered

  MtGOX        |  12.23 |  6.20 |   8.49 |  12.10 |  7.25 |  5.51 |  2.23 |   7.38 |   9.52 |  16.11 | USD,EUR,GBP,AUD,JPY
  BTC-e        |  13.51 |  7.46 |   8.48 |  10.29 |  5.67 | 22.32 |  8.53 |  15.27 |   9.34 |  10.38 | USD,EUR,RUR
  Bitstamp     |  17.11 |  5.49 |   8.42 |   6.97 |  7.67 |  8.31 |  7.40 |  15.78 |   8.70 |   9.70 | USD
  BitFinEx     |  11.47 |  3.81 |   6.63 |   5.46 |  2.89 |  2.97 |  2.83 |  10.99 |   4.62 |   7.88 | USD
  Bitcoin.DE   |   0.61 |  0.27 |   0.23 |   0.39 |  0.45 |  0.69 |  0.42 |   0.52 |   0.30 |   0.34 | EUR
  Kraken       |   0.68 |  0.28 |   0.33 |   0.19 |  0.24 |  0.25 |  0.19 |   0.46 |   0.19 |   0.24 | EUR
  CaVirtEx     |   0.31 |  0.01 |   0.09 |   0.22 |  0.23 |  0.15 |  0.17 |   0.41 |   0.33 |   0.10 | CAD
  CampBX       |   0.16 |  0.04 |   0.04 |   0.10 |  0.09 |  0.05 |  0.08 |   0.13 |   0.04 |   0.05 | USD
  Crypto-Trade |   0.01 |   .   |    .   |   0.01 |  0.01 |   .   |  0.01 |   0.01 |    .   |    .   | USD

  SUBTOTAL     |  56.09 | 23.56 |  32.71 |  35.73 | 24.50 | 40.25 | 21.86 |  50.95 |  33.04 |  44.80 |

  Huobi        |  74.21 | 43.60 |  67.27 |  71.78 | 40.55 | 25.81 | 25.67 |  89.25 |  58.16 |  91.31 | CNY
  OKCoin       |  32.28 | 25.31 |  24.52 |  21.00 | 17.31 | 15.88 | 16.50 |  34.01 |  26.33 |  31.40 | CNY
  BTC-China    |   4.55 |  1.77 |   4.05 |   3.44 |  2.07 |  1.62 |  2.01 |   6.82 |   3.04 |   5.55 | CNY

  SUBTOTAL     | 111.04 | 70.68 |  95.84 |  96.22 | 59.93 | 43.31 | 44.18 | 130.08 |  87.53 | 128.26 |

  TOTAL        | 167.13 | 94.24 | 128.55 | 131.95 | 84.43 | 83.56 | 66.04 | 181.03 | 120.57 | 173.06 |



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. The BTC-e volumes now include retroactively also exchanges to EUR and RUR (together about 1 kBTC/day or less).  Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts, but they are said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

This Sunday jan/26 was rather atypical.  Volume was higher than normal in the Chinese exchanges (128 kBTC), especially Huobi, and price shot up by ~200 CNY from 4850 in intense trading, starting at about 22:00 local time. (As everybody noticed, that rally was basically undone today). 

Volume was slightly higher tha usual in exchanges outside China, but price rallied there too. 

China still has roughly 3/4 of the volume that I can monitor.

People have asked what is the point of these reports.  It seems important to compare the volumes, since (all other things equal, and barring major fakery) the higher-volume sites should have more weight in defining the price.  Arbitrage trading, for example, should generally have a larger impact on the market with smaller volume.

It would be nice to have more data about the trades than just the volume; but even if the data is out there, I will not have the time to collect it.

Well, in percentage terms it is about the same distance...

EDIT but you are right: now that we are at 800 USD, 100 is quite a bit closer than 10,000.

Is Gavin Andresen of the Bitcoin Foundation related to Bitcoin investor Marc Andreessen of Mosaic fame?  (Yes, I noticed the different spelling...)

China is beginning to get out of bed (7:15 am) and does not seem to be in a particularly good mood.

Meanwhile at Bitstamp and BTC-e, after a moment of irrational panic, traders calmed down, checked the news, thought it all over, and switched to a deliberate, methodical, coldly rational panic.

I can believe that; I had sensed that much from some postings in this thread.

But will the world get that?  Who is going to tell them so?

If the Bitcoin Foundation is not representative of the "Bitcoin community", who is?

How will a honest member of the "Bitcoin community" convince investors and government officials that he is not / will not become "another Charlie Shrem"?

Some statistics about MtGOX BTC withdrawal delays by one heavy user (rpietila) : https://bitcointalk.org/index.php?topic=179586.msg4786238#msg4786238

I have heard from a confident and highly imputable source that there are only 1.2 million people in China, the others were just photoshopped in.

OKCoin is still up (charts available through Bitcoinwisdom). 

OKCoin has about 1/3 the volume of Huobi, and apparently follows its price closely but some 30 CNY higher.

Anyone know where it is located? 

Most trade now, in all markets, is done through robots.

Humans like round amounts and prices, but robot transactions are usually determined by formulas and therefore fractional.

Fake trade is when a person (or organization) sells to himself, by hand or through a robot.  As long as the robots belong to competing traders, their transactions are as legitimate as those done by hand.

There may be fake trade happening at Huobi (and at all other exchanges), but the fractional trades do not prove that.  

(Methinks it is foolish to try to outsmart an army of robots without using another robot, but since the price swings appear to be quite random, perhaps the chances are just as good, who knows.)

Bitcoincharts.com dropped BTC-e/USD? 

Now its seems that they list only BTC-e/EUR and BTC-e/RUR.  Yet Bitcoinwisdom.com still lists BTC-e/USD.

And they still don't list Huobi or OKCoin, but list BTC-China.  For technical reasons, or political?

But but but... it is fascinating fake data! 

Hard to find fault with this analysis.  Is any exchange above suspicion in this regard?

I had conjectured a month ago that the purpose of the "ping-pong" robot at MtGOX was to give the appearance of an upward price trend on the charts when in fact there was no real trade for hours on end.

Some people point the finger at Huobi specifically, as if it was particularly suspect.  However,  a large legitimate volume is expected anyway from the large market and the absence of transaction fees.

Moreover, Huobi's volume changes with the hour of day as one would expect from a mostly human clientele that either sleeps at night (and turns off their robots), or lacks personal computers and can only access the site during daytime.

OKCoin's volume is smaller but not zero at night, Either half of their clients are outside China and/or have 24-hour internet access, or half of their volume is fake.

Unfortunately, many novice bitcoin owners will choose to sell their BTC at MtGOX because (a) it seems to offer the best price, by far; and (b) it is still cited in the news, blogs, and chart sites as one of the main exchanges. 

Indeed, but MtGOX's CEO is one of the 6 board members of the Foundation:

https://bitcoinfoundation.org/about/board

Novice bitcoiners probably will not be aware of that...

(Two days ago Charlie Shrem was second on that page, IIRC. )

They already did that, didn't they?  http://www.theverge.com/2013/8/23/4651926/us-government-seized-5-million-from-bitcoin-behemoth-mt-gox

In any case, MtGOX is a Japanese company, so transferring Yen to Japanese banks is obviously much easier and faster than sending them to other countries.

For the same reason, they can be sued by a wronged Japanese client in Japan far more easily and cheaply than by a foreigner located in another country.

Is that even possible? Here in Brazil at least, one cannot sue someone for damages done to a third person.  I bet that there is a Latin term for that...

Perhaps... But I would bet that 95% of the Chinese bitcoin traders (or of all bitcoin traders in the world, for that matter) do not know or care about external factors like the jan/31 deadline, Shrem's arrest, or the NY hearings.  At most, they will look at charts and react to the trends and patterns that they think they see.

Then there are those traders who bought at 6000 CNY and are reluctant to sell at 4800, even if they are aware of a possible crash on jan/31.

Humans are weird creatures.  They will build houses on storm-exposed beaches, on the slopes of active volcanoes, in the path of avalanches and flash floods. And they will invest all their money in "shares" of a "Bitcoin Corporation" that has no assets, no products, no services, no customers, no revenue, no business plans, and will pay no dividends, ever; because they believe that one day it will be worth a million dollars a share.

And the weirdest thing is, they may be right...

Anyone who can hack into a computer where your keys are stored or processed can get your keys.

If your keys go through a computer whose software you can't disassemble or change, the company who provides the software can get your keys.

A while ago someone discovered that most cellphones had a routine instaled by the factory at a very low level, "for maintenance and debugging purposes", that recorded all your button and keystrokes and send them to the manufacturer on demand.

Even if you use an open source OS and software, you can't check the code of every program you download to see whether it contains a trojan.

I don't know in this case, but the result of a public hearing is usually just the transcripts/recordings of everything everybody said, without any conclusions or decisions.  

EDIT: I mean the official result.  The transcripts are usually published on some official government site.

Sorry, is this a joke, or was user "loaded" really one of the people arrested?

Maybe it is yesterdays's dip that needs explaining... Was it Shrem's arrest, or the Russian news?

Unfortunately the chairman of a public hearing is not there to take a decision, he is just the show's host.  His mission is only to introduce the speakers and put them at ease.

The decisions, if any, will be taken by legislators and other government officials in coming months; and they will probably pay more attention to the opinion of bankers and other big investors, than to those given at the hearings...

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Mon !   Tue !   Wed !   Thu !    Fri !    Sat !    Sun !    Mon !    Tue !   Wed !                     
  EXCHANGE     !  01/20 ! 01/21 ! 01/22 ! 01/23 !  01/24 !  01/25 !  01/26 !  01/27 !  01/28 ! 01/29 ! Currencies considered

  Bitstamp     |   6.97 |  7.67 |  8.31 |  7.40 |  15.78 |   8.70 |   9.70 |  25.19 |  20.04 |  7.04 | USD                 
  BTC-e        |  10.29 |  5.67 | 22.32 |  8.53 |  15.27 |   9.34 |  10.38 |  21.02 |  16.82 |  6.53 | USD,EUR,RUR         
  MtGOX        |  12.10 |  7.25 |  5.51 |  2.23 |   7.38 |   9.52 |  16.11 |  10.02 |  11.82 |  7.21 | USD,EUR,GBP,AUD,JPY 
  BitFinEx     |   5.46 |  2.89 |  2.97 |  2.83 |  10.99 |   4.62 |   7.88 |  15.63 |  13.62 |  3.87 | USD                 
  Bitcoin.DE   |   0.39 |  0.45 |  0.69 |  0.42 |   0.52 |   0.30 |   0.34 |   0.60 |   0.49 |  0.33 | EUR                 
  Kraken       |   0.19 |  0.24 |  0.25 |  0.19 |   0.46 |   0.19 |   0.24 |   0.63 |   0.54 |  0.24 | EUR                 
  CaVirtEx     |   0.22 |  0.23 |  0.15 |  0.17 |   0.41 |   0.33 |   0.10 |   0.40 |   0.22 |  0.21 | CAD                 
  CampBX       |   0.10 |  0.09 |  0.05 |  0.08 |   0.13 |   0.04 |   0.05 |   0.13 |   0.20 |  0.07 | USD                 
  Crypto-Trade |   0.01 |  0.01 |   .   |  0.01 |   0.01 |    .   |    .   |    .   |   0.01 |   .   | USD                 

  SUBTOTAL     |  35.73 | 24.50 | 40.25 | 21.86 |  50.95 |  33.04 |  44.80 |  73.62 |  63.76 | 25.50 |                     

  Huobi        |  71.78 | 40.55 | 25.81 | 25.67 |  89.25 |  58.16 |  91.31 |  63.13 |  92.88 | 32.14 | CNY                 
  OKCoin       |  21.00 | 17.31 | 15.88 | 16.50 |  34.01 |  26.33 |  31.40 |  35.41 |  52.37 | 29.11 | CNY                 
  BTC-China    |   3.44 |  2.07 |  1.62 |  2.01 |   6.82 |   3.04 |   5.55 |   4.43 |   6.45 |  1.94 | CNY                 

  SUBTOTAL     |  96.22 | 59.93 | 43.31 | 44.18 | 130.08 |  87.53 | 128.26 | 102.97 | 151.70 | 63.19 |                     

  TOTAL        | 131.95 | 84.43 | 83.56 | 66.04 | 181.03 | 120.57 | 173.06 | 176.59 | 215.46 | 88.69 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. The BTC-e volumes now include retroactively also exchanges to EUR and RUR (together about 1 kBTC/day or less).  Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts, but they are said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

Basically true.  One must distinguish "Investing and speculating in cryptocoins" and "the cryptocoin network".

The latter has the potential of actually creating new wealth by doing a useful service to society, namely allowing cheap international payments without direct bank intervention.  It is debatable how much that service will be worth (in concrete terms; say, how much more bread and wine the world will produce thanks to it).  It coud be a lot --- but certainly a lot less than what Bitcoin salesmen claim.

Investing and speculating in bitcoins does not create any wealth.  With a traditional corporation, the long-term investors are lending money to the company so that it can build the factories that will produce new wealth, and in return they will get a well-deserved fraction of that wealth. Short-term speculators, on the other hand, do not use their money to help the company, but only to suck money from other speculators or unwary novice investors.  (Some governments recognize that: Brazil, for one, has much higher revenue tax for day-trading profit than for long-term investment profit.)

Bitcoin trade is pure speculation, since none of the money that people spent buying bitcoins, from day zero, was loaned to the network to build its infrastructure or to pay his workers.  All the cash that successful bitcoin traders have pocketed came from the pockets of other traders.  All the wealth that bitcoin owners think they own is a slice of the world's future wealth, that they are not helping to create but still hope to grab if and when their bitcoins will be needed.


Actually, banks and many other entities create "money" of some sort, including cryptocoins.  Only productive work creates wealth.

I'm not sure that this is really great good news. 

As I understand it, last December Chinese banks were forbidden to deal in bitcoins themselves, and payment processors were told to stop making bitcoin-based payments and feeding bitcoin exchanges by jan/31.

BTC-China prudently stopped using banks and payment processors right away, and switched to "vouchers" (actually cryptographic keys) that one could buy through e-commerce sites like Taobao.  (Vouchers were not a sucess, the trade volume fell to less than 10%.) OKCoin continued using their corporate bank account for deposits and withdrawals.  Huobi first used the CEO's personal bank account but later switched to a corporate one.

I do not know whether the OKCoin/Huobi solution is acceptable to the government, or they will have to stop on jan/31.  But the market's behavior and BTC-China's decision seem to suggest that it will keep working for the time being.

On the other hand, selling vouchers through e-commerce sites effectively turns the latter into payment processors.  Chinese regulators are not so dumb that they could not see that.  Thus, it was no surprise that the main Chinese e-commerce site Alibaba/Taobao stopped selling BTC-China's vouchers by Jan/14 (ahead of the deadline).   WIth their presumed "safe" system cut off, I guess that BTC-China then decided to risk the OKCoin solution.

So, my conclusion is that it will be easier to move CNY in/out of BTC-China, but even harder to use USD or other currencies there.  BTC-China will now be able compete with Huobi and OKCoin in more even terms. The three of them will probably continue to operate normally beyond jan/31.

Good news for bulls, bad news for bears, I suppose.

Does this make sense?

An interesting experiment, it shows that Huobi's market restores its equilibrium in ~10 minutes after a large out-of-ordinary disturbance.

But there may be also some delayed effect, the event apparently stirred the traders' anthill...

Other markets had similar spikes, but much smaller (~50-100 BTC instead of >500 BTC), more gradual, and slower-rising.  No echo at BTC-China..

But look at the transaction log:


2014-01-30 16:34:06 | 4836.00 | 40.402
2014-01-30 16:33:57 | 4835.99 | 40.523
2014-01-30 16:33:49 | 4836.00 | 40.645
2014-01-30 16:33:40 | 4835.99 | 40.767
2014-01-30 16:33:30 | 4836.00 | 40.890
2014-01-30 16:33:21 | 4835.99 | 41.013
2014-01-30 16:33:12 | 4836.00 | 41.136
2014-01-30 16:33:02 | 4835.99 | 41.259
2014-01-30 16:32:53 | 4836.00 | 41.383
2014-01-30 16:32:44 | 4835.99 | 41.507
2014-01-30 16:32:34 | 4836.00 | 41.632
2014-01-30 16:32:24 | 4835.99 | 41.757
2014-01-30 16:32:15 | 4836.00 | 41.883
2014-01-30 16:32:06 | 4835.99 | 42.008
2014-01-30 16:31:56 | 4836.00 | 42.134
2014-01-30 16:31:47 | 4835.99 | 42.261
2014-01-30 16:31:45 | 4836.00 |  4.000
2014-01-30 16:31:38 | 4836.00 | 42.388
2014-01-30 16:31:29 | 4835.99 | 42.515
2014-01-30 16:31:19 | 4836.00 | 42.643
2014-01-30 16:31:10 | 4835.99 | 42.771
2014-01-30 16:31:00 | 4836.00 | 42.900
2014-01-30 16:30:52 | 4835.99 | 43.028
2014-01-30 16:30:43 | 4836.00 | 25.776


There is obviously a strongly negative feeling in this forum against Huobi and OKCoin, and very warm feelings about BTC-China. People keep claiming that Huobi's volume is fake (even though strong evidence of fakery has been shown only at other exchanges); and seem very happy that BTC-China is back in business (even though it will be just another Chinese-only(?) exchange).

May I ask why this bias? Personal reasons, or some technical features that I cannot see?

                                             Ah.

Thanks!...

The runaway robot at BTC-China has been turned off a few minuts ago.

The 1-minute chart is very interesting.

It all happened around 4:00 03:00 am local time, so perhaps it was a stupid programming mistake.  (Reminds me of the very first internet worm by Robert Morris. 8-)

EDIT: Spoke too soon.  The robot was briefly turned on again a couple of times. Now the charts are no longer updating.

Why would the bad guys use physical presence and physical force when they can remotely hack into my computer, install a virus that will steal my keys just when I try to use them, and have it send my bitcoins instead to a mixer in Timbuctu?

The police could perhaps save me from the wrench method.  Who is going to help me recover my hacked-off bitcoins?

But the image that is being sold to the public is that one will be able to pay purchases in bitcoins by pointing one's smartphone at a QR code on the cashier's screen.  How could I do that without exposing my keys to a hacker attack?

But BTC-China will be competing with Huobi and OKCoin for the same market, won't they? 

I do not see why BTC-China would attarct new investors.  Do they have any advantage over the other two, e.g tariffs?

A plot of the ratio of prices MtGOX / Bitstamp since sep/2013:



The prices are weighted mean prices in each 1-hour interval, obtained from http://bitcoincharts.com/

The labels on the X-axis are approximate months of 2013; "13" is jan/2014.

Looking at the price charts one would think that MtGOX is very active.  However the Chartbuddy plots of its order book (the rightmost one in each pair),



show that nothing significant is happening there, for hours on end.  In those charts one can see that the "real" spread is usually large (10-20 USD).  However, there are some small transactions and orders bouncing up and down within the spread.  It is those transactions that make the MtGOX 1-minute price chart look like a broad hatched stripe. (In contrast, the Bitstamp 1-minute chart looks like a wriggly line.)

Maybe something completely preposterous, there are always people who will believe even the most absurd and unbelievable claims. For example:

* Scientists discover that the "security" of SHA is entirely based on an unproven math conjecture.

* Operator of a major Bitcoin exchange  flees after stealing all his clients' bitcoins.

* Founding member of the Bitcoin Foundation is arrested, charged with using Bitcoin exchange for drug trafficking.

* Bitcoins are being stolen from accounts of major exchange https://bitcointalk.org/index.php?topic=324918.msg4840947#msg4840947

* FBI documents reveal that it has the means to trace bitcoin transactions and seize bitcoins without the owner's knowledge.

* Alternative cryptocoins appear, threaten to reduce demand for Bitcoin in the future.

* There are millions of hoarded Bitcoins that were bought for less than 10 US$ and may be dumped at any moment.

* Economist warns that Bitcoin's price will fall to less than 10 US$ as soon as the market realizes that it will fall to less than 10 US$.

* Media loses confidence in established Bitcoin leaders, turns to the Wall Observer thread for reliable market analysis.

It already happened gradually over the last two months as payment processors and e-commerce sites cut their channels to the exchanges, ahead of the deadline.

All three exchanges are now working with withdrawals/deposits, in CNY only, to their corporate bank accounts; this arrangement is believed to be acceptable to the Government.  (BTC-China may also try to continue using their vouchers in a more limited fashion.)

So, the price will probably resume its normal behvior after the holidays -- that is, steady except for the usual level of unexpected rallies and crashes. 

As others have observed, that was not real trade. It was some robot, probably buggy, frantically selling to itself. It was turned off after 3 hours and ~40,000 BTC traded.

BTC-China should expunge that fake volume from its records.  If not, chart makers should do it.  In reality BTC-China is still quite dead.

Their bank must be closed for the New year holidays, so BTC-China should not have received any new money yet.

By the way, that market ranking site does not even list Huobi, which has the largest volume of them all (twice as much as OKCoin).

My paranoia sees an ongoing conspiracy to deny the very existence of Huobi and push customers towards BTC-China (and Mt.GOX).  She is wrong of course.

Here is my prediction for the coming month:



The plot shows the Bitstamp prices from Nov/2013 to Jan/2014 (purple) and estimated lower and upper bounds for Feb/2014 (green).  I claim that, in any 1-hour interval in the coming month, the Bitstamp price will be within the two green lines above, with 95% probability.

For example, I claim that on Feb/22 the price will be between 300 USD and 2200 USD with 95% probability.

(Note that this is not the same thing as saying that the entire price plot will stay in that region for the whole month with 95% probability.)

This prediction is based on the simple "log Brownian" model that I described a while ago.  Namely, it assumes that the price change from one 1-hour interval to the next, in log scale, is a normal random variable that is independent of the previous history. 

More precisely let P(i) be the weighted mean transaction price in the 1-hourinterval number i.  Let Z(i) be log_10(P(i)). The model assumes that

  Z(i+1) = Z(i) + C*RAND(i)

where the factors RAND(i) are independent random variabls with zero mean, unit deviation, and Gaussian distribution.  Therefore, for any n > 0,

  Z(i+n) = Z(i) + C*sqrt(n)*RAND(i,n)

where factors RAND(i,n) are again random (but not independent) variables with zero mean, unit deviation, and Gaussian distribution.

Analysis of the Bitstamp prices from Sep/2013 to Jan/2014 yields 0.00964 as the best fit for the parameter C.

Since 95% of the probability of the Gaussian distribution is within 2 deviations of the mean, the model implies that, n steps in the future,
the value Z(i+n) will be within the values

  Zmin(i,n) = Z(i) - 2*C*sqrt(n) and
  Zmax(i,n) = Z(i) + 2*C*sqrt(n)

with 95% probability, where Z(i) is the current (last known) price.  The green lines are these two bounds, converted back to linear scale (Pmin(i,n) = 10**Zmin(i,n), etc.)

More specifically, according to the model, at any specific 1-hour interval i+n in the future, the log price Z(i+n) will be

   below Zmin(i,n) with 2.5% probability;
   between Zmin(i,n) and the current price Z(i) with 47.5% probability;
   between the current price Z(i) and Zmax(i,n) with 47.5% probability;
   above Zmax(i,n) with 2.5% probability.

Note that, by this model, the future prices P(i+n) may be on either side of the current price (red line) with equal probability, even though the inverse log mapping yields a much wider range above than below.
 
Of course this model is quite rudimentary and basically useless for traders.  There may be more sophisticated models, but I doubt that they can yield better predictions. 

(The Brownian model is visibly inadequate for small n, since the log price increments from one interval to the next do not have a Gaussian distribution.  As a consequence, the 2*sigma interval Zmin(i,n) to Zmax(i,n) contains somewhat less than 95% of the probability.  However, by the Law of Large Numbers the distribution becomes almost Gaussian after a few hours. )

(before people ask: no, a model with a linear "historical trend" term Z(i+n) = Z(i) + T*n + C*sqrt(n)*RAND(i,n) does not seem appropriate, and its predictions for the next month would not be significantly different.)

I am sure that there exist better prediction methods (say, that provide "X% confidence" intervals that are narrower than those of the Brownian model but still  contain the predicted value at least X% of the time in the long run).  I am a complete amateur in this field.

Indeed, as you say, a fat tail is evident in the distribution of the one-step increments Z(i+1) - Z(i).  However, both theory and data tell me that a Gaussian distribution, with linearly increasing variance,  works well for larger steps Z(i+n) - Z(i) when n is ~20 hours or more.  See this plot:



This is a series of crude histograms of the quantity R(i,n) = (Z(i+n) - Z(i))/sqrt(n), sampled from the reference datafile (Bitstamp 2013-09-01 to 2014-01-30, 1 hour intervals) with various values of i,  tallied separately for each stride n.  The "n" axis runs across the middle of the plot, with n=1 at the upper left edge and increasing down to the right. The "R" axis is perpendicular to it, with R=0 in the middle.  The histogram for each n is normalized to unit sum.

The long fat tails and narrower peak of the distribution for small n is quite evident.  However, as n increases, the tails and sharp peak seem to disappear, as one would expect from the Law of Large Numbers.

Actually, I am not really sure about the tails because the number of samples in each histogram also gets smaller when n increases.  Perhaps the following plot is more convincing:



In this plot, the horizontal axis is the stride n (hours), and the vertical axis is the log increment D(i,n) = Z(i+n) - Z(i)  (not divided by sqrt(n)).

The light brown crosses on each vertical line are a sample of differences D(i,n) with same value of n and various values of i.  Each green dot is the mean of the sample increments D(i,n) with same n.  Each red dot is the standard deviation of those increments, computed assuming that their expected value is 0 (rather than the empirical mean shown by the green dot).  The histogram-like lines are the 2.5% and 97.5% percentiles of those samples. 

The orange curve is the deviation sigma(n) = C*sqrt(n) of D(i,n) predicted by the log-Brownian model.  The purple curves are the ±2*sigma(n) bounds above and below D=0.

According to this plot, for n ~15 hours or more, the empirical deviation (red dots) is very close to the model C*sqrt(n) (orange line).  For n ~30 hours or more, the curves ± 2*C*sqrt(n) folow the empirical 2.5%-97.5% percentiles as accurately as one could expect. 

The model clearly fails for smaller n; in particular, over the span of 5 hours, large swings occur more often than would be expected in a log-Brownian model.   Therefore, I  was too confident in my prediction for tomorrow; but with a bit of luck, I should be safe for the rest of the month. 

The slightly ascending green line means that there is a consistent increasing trend in that sample.  That trend also manifests itself in the growing gap between the empirical 2.5% percentile and the -2*sigma(n) curve.  However, if I had used only the last 2 months of data for the analysis, instead of the last 5, the trend would have been decreasing - and stronger.  That is one of the reasons why I did not include a trend term.

I have looked for correlations between successive increments (Z(i) - Z(i-1)  and Z(i+1)-Z(i)), but did not see anything clearly significant.  If there is such a correlation, it must be very subtle, and should be quickly "forgotten" after a few time steps.

Note that real stock prices are influenced by "real world" factors such as demand for the product, raw material prices, etc.  Those factors vary according to their own nature in various time scales, that range from decades to hours.  Maybe it is those factors that provide the long-term correlations characteristic of fractal signals?

In contrast, Bitcoin's price is almost entirely set by speculation; while external news may trigger changes, they do not directly determine the magnitude of those changes. ("How many billion dollars were subtracted from Bitcoin's future usage in e-commerce payments because of Shrem's arrest?")

So perhaps Bitcoin's price is indeed better described by a log-Brownian model than by a fractal process...

Basically, that is it, yes.

My number hacking so far is telling me that the market does not care for the past history of the price, not even over the past hour; it only considers the current price and increases or decreases it by a random percentage amount.   If that is true, no analysis, no matter how sophisticated, will be able to provide substantially better forecasts than those stupid green lines derived from the log-Brownian model.

You say that an experienced bitcoin trader would have guessed "300-2200 in 20 days" without doing any math.  Possibly.  It may be that, after staring at the charts for years, those traders developed a subconscious "calculator" to make such predictions.  If they got the right intuition, their guesses should roughly match my green lines.

PS. Besides the fat tails for small n, there is another conspicuous feature of the data that the log-Brownian model does not capture.

Looking at a plot of the increments Z(i+1)-Z(i) as a function of i, it seems evident that the the typical magnitude of the increments changes markedly but slowly over a time scale of several hours.   That is, there are periods when the increments are quite large, other periods when they are quite small; even though in both cases they seem to be equally random and independent.  (These slow  variations in the standard deviation may perhaps account for the long tails of the global distribution).

The periods when the increments are larger seem to correlate (not surprisingly) with the periods when the trade volume per hour is larger.   Thus the following model may be more acurate:

  Z(i+1) + Z(i) + B*V(i)*RAND(i)

where V(i) is the trade volume in the sampling interval i, and B is another constant (that measures how much the price is disturbed, in the rms average sense, whenever one BTC gets traded).  Note that if the volumes V(i) are nearly constant then this is the same as the simpler model, with C = B*V(i).

If this hunch is correct, then one should perhaps describe the price changes in terms of a "volume clock", instead of the usual time clock.

That is, let's define the "accumulated volume" as the total amount of BTC traded between some fixed reference time in the past to each subsequent time.  Let's write Q(v) for the price when the accumulated is v, and let Y(v) be log_10(Q(v)).  Then the log-Brownian model in "volume clock" predicts that

  Y(v+w) = Y(v) + E*sqrt(w)*RAND(v,w)

where E is a constant, and RAND(v,w) are random variables (not independent) with zero-mean, unit-variance Gaussian distribution.

This model may yield tighter confidence intervals for the future price Q(v+w).  However, it does not predict the price range after n hours in the future, but rather after an additional w bitcoins will have been traded.   

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !   Wed !   Thu !    Fri !    Sat !    Sun !    Mon !    Tue !   Wed !   Thu !   Fri !                     
  EXCHANGE     ! 01/22 ! 01/23 !  01/24 !  01/25 !  01/26 !  01/27 !  01/28 ! 01/29 ! 01/30 ! 01/31 ! Currencies considered

  Bitstamp     |  8.31 |  7.40 |  15.78 |   8.70 |   9.70 |  25.19 |  20.04 |  7.04 | 13.13 |  7.73 | USD                 
  BTC-e        | 22.32 |  8.53 |  15.27 |   9.34 |  10.38 |  21.02 |  16.82 |  6.53 | 12.54 |  4.65 | USD,EUR,RUR         
  BitFinEx     |  2.97 |  2.83 |  10.99 |   4.62 |   7.88 |  15.63 |  13.62 |  3.87 |  8.18 |  3.91 | USD                 
  MtGOX        |  5.51 |  2.23 |   7.38 |   9.52 |  16.11 |  10.02 |  11.82 |  7.21 |  6.60 |  4.45 | USD,EUR,GBP,AUD,JPY 
  Bitcoin.DE   |  0.69 |  0.42 |   0.52 |   0.30 |   0.34 |   0.60 |   0.49 |  0.33 |  0.47 |  0.35 | EUR                 
  Kraken       |  0.25 |  0.19 |   0.46 |   0.19 |   0.24 |   0.63 |   0.54 |  0.24 |  0.37 |  0.20 | EUR                 
  CaVirtEx     |  0.15 |  0.17 |   0.41 |   0.33 |   0.10 |   0.40 |   0.22 |  0.21 |  0.25 |  0.24 | CAD                 
  CampBX       |  0.05 |  0.08 |   0.13 |   0.04 |   0.05 |   0.13 |   0.20 |  0.07 |  0.06 |  0.05 | USD                 
  Crypto-Trade |   .   |  0.01 |   0.01 |    .   |    .   |    .   |   0.01 |   .   |  0.01 |   .   | USD                 

  SUBTOTAL     | 40.25 | 21.86 |  50.95 |  33.04 |  44.80 |  73.62 |  63.76 | 25.50 | 41.61 | 21.58 |                     

  Huobi        | 25.81 | 25.67 |  89.25 |  58.16 |  91.31 |  63.13 |  92.88 | 32.14 | 29.27 | 15.26 | CNY                 
  OKCoin       | 15.88 | 16.50 |  34.01 |  26.33 |  31.40 |  35.41 |  52.37 | 29.11 | 18.56 | 17.11 | CNY                 
  BTC-China    |  1.62 |  2.01 |   6.82 |   3.04 |   5.55 |   4.43 |   6.45 |  1.94 |  1.99 |  1.17 | CNY (NOTE 1)

  SUBTOTAL     | 43.31 | 44.18 | 130.08 |  87.53 | 128.26 | 102.97 | 151.70 | 63.19 | 49.82 | 33.54 |                     

  TOTAL        | 83.56 | 66.04 | 181.03 | 120.57 | 173.06 | 176.59 | 215.46 | 88.69 | 91.43 | 55.12 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. The BTC-e volumes now include retroactively also exchanges to EUR and RUR (together about 1 kBTC/day or less).  Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts, but they are said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

(NOTE 1) On 2014-01-30, BTC-China had a burst of extremely fast, regular and atypical transactions, all with similar amounts (a few tens of BTC) and prices (~4836 CNY), adding up to about 41,050 BTC.  The burst started suddenly around 17:00 UTC and and stopped suddenly around 19:30 UTC. Presumably those transactions were made by a faulty robot trading against itself or some other robot, and did not represent actual exchange of money and bitcoins between distinct individuals. Therefore those anomalous transactions were subtracted from the BTC-China volume for Jan/30.

On most of the exchanges that I monitor, the BTC trade volume for Friday Jan/31 was extremely low.

Huobi (15.26 kBTC) and BTC-China (1.17 kBTC) were the most affected; both had about 1/6 of the volume of last Tuesday's  (Jan/28).   For the non-Chinese exchanges, that ratio was around 1/3.

The decrease at Chinese exchanges is easy to understand, since Jan/31 is the Chinese new Year, and AFAIK people have several days of vacations before and/of after it.  But the fall at the non-Chinese sites is puzzling, since they are usually very active on Fridays. 

This "experiment" may show how much China infuences other exchanges.   Except for MtGOX, the prices in all exchanges are obviously tied by arbitrage.  So perhaps (less volume in China) --> (less price variation) --> (less volume at all exchanges).  Or perhaps arbitrage trading is a large part of the volume; then (less volume in China) --> (less price variation in China) --> (less arbitrage trade).

OKCoin fell "only" to 1/3 compared to Tuesday.  That is another hint that its clientele includes a significant non-Chinese component (the people who keeep trading while the Chinese are all asleep).

We all know about BTC-China's rogue robot that traded ~40,000 BTC in 2.5 hours, 40 BTC at a time, around Jan/30 18:00 UTC (Jan/31 02:00am in China) .  But there are other weird things going on at that site.  For example, its order book now has an offer to sell ~100 BTC @ 4872.38 CNY, and a bid for ~175 BTC @ 4872.37 CNY -- and those two guys just sit there, nose-to-nose, without moving a penny. 

Like some other exchanges, BTC-China also has a stream of small trades within that narrow spread, moslty below 40 BTC. I suspect that it is a robot trading with itself, to cover up the lack of real transactions and/or to inflate their volume.

Once in a while, there is a transaction that changes the price: arbitrage, perhaps?

The crypto-coin community urgently needs to define professional ethics standards for exchanges, and set up an international entity that will audit them and rate them for compliance.

Is that a fact (say, deduced from analysis of the blockchain)?

When one wants to buy or sell something vauable, it is usually better to do it through a market or broker.  Otherwise one may waste a lot of time looking for the partner, and  the price may  end up being well above or below the market's price - leaving one of the sides quite frustrated.

So, who would want to trade bitcoins in private, and why?

Well, considering the amount of trade they have, their order books must be huge, and must change very fast.

Since there are many sites (like bitcoinwisdom) that request that data every few seconds, their decision to truncate
the list is understndable.

EDIT: Perhaps they can be convinced to provide a coarse sampling of the full volume/price curve in real-time,
for the chart sites, and a full snapshot of the whole book every hour or so, for statisticians and such.

For my part, so far I have seen convincing evidence of fake trade at Mt.GOX, and now at BTC-China.

The first time I paid attention to Bitcoins was when Rick Falkvinge (founder of the first Pirate Party) tweeted a glowing endorsement, announcing that he was investing all his savings into Bitcoins.  And the first time I heard abot Mt.GOX was around Dec/01, when Rick denounced them for replaying the same transactions over and over while the price was actually falling through the floor. (If it was a bug, it was a very convenient one...)

People have claimed that most of Huobi's volume is fake, but I am not convinced yet. Note that a transaction, whether by hand or by robot, is not fake if it entails an exchange of money and bitcoins between two competing traders.

Huobi has lots of robot trade and thinly sliced orders, but I have yet to see convincing evidence of fake transactions.  For one thing, their volume is nearly zero after midnight, lower at holidays, etc. (Mt.GOX's "ping-pong" robot, in contrast, ran continuously for days at a steady rate, stopping and starting abruptly.)

(BTW, Rick later retracted his endorsement of Bitcoin, after he realized that transactions are not at all anonymous and untraceable, as bitcoiners used to claim.)

It looks like Huobi and OKCoin will see even less volume today than they did yesterday (well under 10 kBTC), so the price will probably stay where it is.  

This could be a chance for the non-Chinese exchanges to retake control of the market.  But their volume too is very low, probably still lower than the Chinese.  MtGOX has some  volume but most of of it may be fake, since it is fairly regular, does not sleep at night, and started suddenly around 13:00 UTC yesterday (Jan/31); it could be an improved version of the ping-pong robot.  

Which makes me ask again the question: volume and price changes, which is the cause and which is the effect?  Or are they like chicken and egg?

From BTC-China's English-language page: "With the most buyers and sellers, BTC China has the highest trading volumes in China, and offers the most liquidity of all exchanges." Really?

What is a "market maker"?  How does the new BTC-China "market maker reward" work?  Has it been tested in other markets before?

Thanks!  But I still do not understand BTC-China's reward scheme...

Thanks!  Now I got it...

But does that really encourage volume?

It seems that it encourages posting an order a penny above or below the best opposite offer, and waiting for the other guy to make the move.

Which, by the way, is what seems to be happening at BTC-China right now...

That paper claims that Bitcoin prices must have memory because the square of the log-price increments shows medium-term autocorrelation.

My interpretation is that the trade volume has a natural time scale of a couple of hours (traders stick around for a while once they "come in").

In turn, the trade volume modulates the standard deviation (rms magnitude) of the increments.

So, there is no memory in the price per se.  Rather, the real "market clock" (that counts BTCs traded, not time) turns at variable speed, and has some inertia.

That is, if twice as many transactions as usual happened in one hour, that has the same effect on price as two hours of trade at normal levels.

Those variations in trading volume per hour may have the effect of "mandelbrotizing" the price charts, I don't know.

However I do not think that fractal analysis can produce much better predicitions that the simple log-Brownian model, unless it can somehow predict the changes in  volume.

But there are other variables that should be considered first,because theh have a larg impact on volume - like, what are the sleep hours in China, when will banks open after New Years, etc.

Bitcoin may not be a Ponzi schema itself, but her is how you could run a Ponzi schema with bitcoin:

1, open an exchange.

2. Post yourself a bid at 10% over market price, say 1100$ instead of 1000$.

3. First client rushes in, sells 1 BTC. You credit his account with 1100$, warn him that withdrawal may take a couple weeks.

4. You sell that BTC at another exchange for 1000$.

5. Second client comes and sells 2 BTC. You credit him 2200$ and warn of delays.

6. You sell those two BTC for 2000$, now you have 3000$

7. You pay the first client 1100$,  still have 1900$ left.

8. Third client comes in, sells 4 BTC, ...

You guess the rest.  Like any Ponzi, it works while the clientele keeps expanding (but you may have to increase the spread, say 20%). Eventually you run pout of fresh clients and the thing collapses.  

BTC-China currently is not a market. I can't figure out what it is.

It seems that rallies and crashes and blips and blops only occur when Huobi is active, which is only when the Chinese are awake and not having New Year's dim sum with their families.

And there are many bitcoin chart/statistics sites that do not even mention them...

I would further conjecture that Chinese rallying bulls are active mostly between evening and midnight 23:00, when they go to bed. Then the crashing bears take over and stay up until 02:00 01:00 am.

Unless they are all pump-and-dump werebears (bulls that turn into bears at the hour when the full moon would be at zenith if the moon was full).

EDIT: that's China's local time of course, which I believe is 9 8 hours ahead of UTC.  So 00:00 would be 15:00 16:00 UTC and 02:00 am would be 17:00 18:00 UTC, on the previous date.

EDIT: Fixed local times; China's time is UTC+08:00 not UTC+09:00

I checked it and it seems really helpful.  I just learned for example that if you use a humidor, you should not stick your cigar into the same opening where you poured the water in.

(But what is a "humidor" in Quality Technical Analysis jargon?  A Fibonacci fractal type of choo choo train?)

Ah, distinctly I remember; it was in the bleak December,
And each dipping streak of ember brought the price through the floor;
And the sick and sad uncertain trending of that crimson curtain
Thrilled me - filled me with fantastic terrors never felt before.

The rest is from Poe, too (almost).  

I am obssessively interested, admitted, but it is only one of many obsessions I had through life.  Two years ago it was Fukushima, for instance.  There were also the Voynich manuscript, Wikipedia, Wikimapia, and other more technical ones...

An obsessive personality is almost basic requirement in academia, actually.  In any field of research, if you are not obsessed with your subject you have little chance of discovering new things; and if you don't, you don't publish, and you don't get promoted...

Campinas is sort of like like Finland in winter, without the winter. "Entertainment" is four shopping malls with some 40 movie theaters that may show almost five different movies at the same time...

Just because I wrote that... A foot-long lizard came into our living room, scared the hell out little doge doggy.  We shooed him out. (Doesn't seem to be a native species, may be some neighbor's escaped pet.)

But proves nothing, it surely could have happened in Finland too, with a reindeer or something.

Now, on topic:

One would expect that a big "wall" - an offer to buy or sell 100 BTC or more, sitting in the order book - would be a barrier for the price, halting its fall or rise for a while.

But could it be that a big wall also attracts large transactions that "eat" it instantly?  

Suppose that the highest bid is at 900$ and there are only small bids all the way down to 700$, adding to 20 BTC.  

Someone who wants to sell 100 BTC at 800$ minimum will probably wait.  If he sells 10 BTC to the small bidders in the 800-900 range, the price will fall to 800$.  Some bidders will get scared and lower their bids even more, further away from his sell goal.

Now suppose someone puts up a bid for 150 BTC at 800$; then that seller would immediately sell his batch.

In this example, the existence of the big wall triggered a price drop that would have been delayed indefinitely without it.  Does this sort of thing happen in reality?  If so, is it common enough to negate the "protective" effect of big walls?

I was there last october actually.  But "few hours" is more like six, on low traffic days...

Yes, the Serra do Mar plateau scarp covered with semitropical forest may be the best scenery in the whole State.  I know of at least one "Amazon jungle" movie that was actually shot there.

Is that a full day? Yesterday's was around 6000 BTC I think.

Presumably many naive investors still choose to sell their BTCs at Mt.GOX because of the 130+ USD price difference. But every transaction has two sides, and neither novice nor expert would want to buy at that inflated price.  So who is buying those new coins?

The theory here seems to be that the buyers are old customers trying to get their money out via BTC, since they can't get it through USD.

But, is that plausible?  Methinks that an investor would rather wait for six months to get all his money out, rather than take a 13% loss.  Even if he needs some of the money right now, wouldn't it be be cheaper to get a loan?

All cryptocoins are brothers in fate, if one fails the others will suffer too.

Pure bitcoiners may rejoice in the demise of a competitor, but people out there will wonder: if Dogecoin crashed without warning or reason, why wouldn't Bitcoin too?

Thanks, I suppose you mean this:

http://www.businessinsider.com/dogecoin-crashed-this-weekend-2013-12

So its price crashed because its popularity soared. That may be good news for Bitcoin indeed.

You play heads-or-tails for money, and two seers in funny clothes knock at your door, claiming to be able to predict the outcome of the next coin throw.

One elucubrates over the outcomes of past throws with astrolabe and compasses, and then proclaims "heads" or "tails" before each throw.

The other meditates in the lotus pose, eyes closed, and then says "50% chance that the next throw will be tails".

Which of the two seers would you hire? 

I was looking at Cryptsy DOGE/BTC in the http://Bitcoinwisdom.com charts

Er, um, but doesn't that imply that in the future everybody will use Dogecoin, no one will use Bitcoin?

In the context of stocks, it does not seem to be useful to think of "the Apple stock market" or " the Google stock market", except when "market" is short for "supply and demand".

It seems more useful to think that there is just one stock market, where the stocks of all companies are traded together.  That's because traders can quickly sell one stock and buy another as they see fit.  New investment money that comes into one stock promptly "diffuses" to other stocks.  Thanks to arbitrage traders, one can even think of all stock exchanges of the world as a single market.

Methinks that the same is happening in the world of crypto-currency, with regard to both the exchanges proper and the support network.

The most reputable (or least disreputable?) crypto exchanges seem to be well connected by arbitrage, so that prices tend to rise and fall together.  Several already trade two or more crypto-coins, against each other and against national currencies.  Many traders already own and play with several types of crypto-coins at the same time.  So perhaps we should start thinking of "the crypto-coin market" instead of "the Bitcoin market", "the Litecoin market", etc.

As for the support network, it seems that many miners will direct their efforts to whatever crypto gives the best return at the moment.   So, even though the blockchains are independent, we should perhaps think of just one Crypto-Coin Network, that supports all cryptos according to usual cost/profit principles.

Does this make sense? 

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Fri !    Sat !    Sun !    Mon !    Tue !   Wed !   Thu !   Fri !   Sat !   Sun !                     
  EXCHANGE     !  01/24 !  01/25 !  01/26 !  01/27 !  01/28 ! 01/29 ! 01/30 ! 01/31 ! 02/01 ! 02/02 ! Currencies considered

  BTC-e        |  15.27 |   9.34 |  10.38 |  21.02 |  16.82 |  6.53 | 12.54 |  4.65 |  6.30 |  4.74 | USD,EUR,RUR         
  Bitstamp     |  15.78 |   8.70 |   9.70 |  25.19 |  20.04 |  7.04 | 13.13 |  7.73 |  8.30 |  4.07 | USD                 
  BitFinEx     |  10.99 |   4.62 |   7.88 |  15.63 |  13.62 |  3.87 |  8.18 |  3.91 |  4.54 |  3.15 | USD                 
  MtGOX        |   7.38 |   9.52 |  16.11 |  10.02 |  11.82 |  7.21 |  6.60 |  4.45 |  5.13 |  2.28 | USD,EUR,GBP,AUD,JPY 
  Bitcoin.DE   |   0.52 |   0.30 |   0.34 |   0.60 |   0.49 |  0.33 |  0.47 |  0.35 |  0.33 |  0.35 | EUR                 
  Kraken       |   0.46 |   0.19 |   0.24 |   0.63 |   0.54 |  0.24 |  0.37 |  0.20 |  0.23 |  0.15 | EUR                 
  CaVirtEx     |   0.41 |   0.33 |   0.10 |   0.40 |   0.22 |  0.21 |  0.25 |  0.24 |  0.24 |  0.20 | CAD                 
  CampBX       |   0.13 |   0.04 |   0.05 |   0.13 |   0.20 |  0.07 |  0.06 |  0.05 |  0.23 |  0.16 | USD                 
  Crypto-Trade |   0.01 |    .   |    .   |    .   |   0.01 |   .   |  0.01 |   .   |  0.01 |  0.01 | USD                 

  SUBTOTAL     |  50.95 |  33.04 |  44.80 |  73.62 |  63.76 | 25.50 | 41.61 | 21.58 | 25.31 | 15.11 |                     

  Huobi        |  89.25 |  58.16 |  91.31 |  63.13 |  92.88 | 32.14 | 29.27 | 15.26 | 28.86 | 26.27 | CNY                 
  OKCoin       |  34.01 |  26.33 |  31.40 |  35.41 |  52.37 | 29.11 | 18.56 | 17.11 | 20.38 | 20.00 | CNY                 
  BTC-China    |   6.82 |   3.04 |   5.55 |   4.43 |   6.45 |  1.94 |  1.99 |  1.17 |  2.31 |  2.21 | CNY (NOTE 1)         

  SUBTOTAL     | 130.08 |  87.53 | 128.26 | 102.97 | 151.70 | 63.19 | 49.82 | 33.54 | 51.55 | 48.48 |                     

  TOTAL        | 181.03 | 120.57 | 173.06 | 176.59 | 215.46 | 88.69 | 91.43 | 55.12 | 76.86 | 63.59 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. The BTC-e volumes now include retroactively also exchanges to EUR and RUR (together about 1 kBTC/day or less).  Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase volume is not available, neither at Bitcoinwisdom nor at Bitcoincharts, but they are said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

(NOTE 1) On 2014-01-30, BTC-China had a burst of extremely fast, regular and atypical transactions, all with similar amounts (a few tens of BTC) and prices (~4836 CNY), adding up to about 41,050 BTC.  The burst started suddenly around 17:00 UTC and and stopped suddenly around 19:30 UTC. Presumably those transactions were made by a faulty robot trading against itself or some other robot, and did not represent actual exchange of money and bitcoins between distinct individuals. Therefore those anomalous transactions were subtracted from the BTC-China volume for Jan/30.

As many must have noticed, volume was generally quite low over the last two days. 

Volume in China actually recovered a bit compared to Jan/31 (Chinese New Year), to about 50 kBTC.   Huobi's hour-by-hour volume followed an unusual pattern: low in the morning and lunchtime, growing to very high at night, and falling to near zero only after 02:00 am.   Not implausible for an extended holiday, I would say.

BTC-China seems to be still in zombie mode; the little real volume they have may be just arbitrage.

The total volume outside China, on the other hand, was a record low this Sunday Feb/02.  It was ~25% less than Friday's Jan/31 (itself 50% less than previous Friday's Jan/24) and only ~1/3 of previous Sunday's Jan/26.

The biggest drop outside China was at Mt.GOX: only 2.28 kBTC on Sunday Feb/02, which is ~1/2 of Fri Jan/31 and Sat Feb/01, and ~1/5 of previous Sunday's Jan/26.

 

Er, how many coins will be mined to the end of March? 

Are the low prices really due to the influx of mined coins?

To me, the great puzzle is who could be buying those coins at 130 US$ over market price.  (It is easy to guess who is selling them.)
The only answer I can think of should scare everyone who has accounts there, in cash or bitcoins.

It is midnight 23:00 already in China but the Chinese are still glued to their screens, working hard to fulfill your wish.

Unfortunately, half of them are bulls, half are bears...

The first 60 seconds may comfort some here: http://www.youtube.com/watch?v=-lvoAxSbtlo 

(Read by the author: http://www.youtube.com/watch?v=AHabJ0lLx5A )

And this one had me slightly worried, somewhat:

http://www.youtube.com/watch?v=5qzwOAsGCdw  

My guess is that it is a robot selling to himself at a slowly increasing price within the spread, to give the impression that the price is rising when in fact is may be falling.

It also helps build volume, and prevents gaps in the charts when there are too few trades.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Sat !    Sun !    Mon !    Tue !   Wed !   Thu !   Fri !   Sat !   Sun !   Mon !                     
  EXCHANGE     !  01/25 !  01/26 !  01/27 !  01/28 ! 01/29 ! 01/30 ! 01/31 ! 02/01 ! 02/02 ! 02/03 ! Currencies considered

  BTC-e        |   9.34 |  10.38 |  21.02 |  16.82 |  6.53 | 12.54 |  4.65 |  6.30 |  4.74 |  5.75 | USD,EUR,RUR         
  Bitstamp     |   8.70 |   9.70 |  25.19 |  20.04 |  7.04 | 13.13 |  7.73 |  8.30 |  4.07 |  4.93 | USD                 
  BitFinEx     |   4.62 |   7.88 |  15.63 |  13.62 |  3.87 |  8.18 |  3.91 |  4.54 |  3.15 |  3.45 | USD                 
  MtGOX        |   9.52 |  16.11 |  10.02 |  11.82 |  7.21 |  6.60 |  4.45 |  5.13 |  2.28 |  3.37 | USD,EUR,GBP,AUD,JPY 
  Bitcoin.DE   |   0.30 |   0.34 |   0.60 |   0.49 |  0.33 |  0.47 |  0.35 |  0.33 |  0.35 |  0.51 | EUR                 
  Kraken       |   0.19 |   0.24 |   0.63 |   0.54 |  0.24 |  0.37 |  0.20 |  0.23 |  0.15 |  0.21 | EUR                 
  CampBX       |   0.04 |   0.05 |   0.13 |   0.20 |  0.07 |  0.06 |  0.05 |  0.23 |  0.16 |  0.10 | USD                 
  CaVirtEx     |   0.33 |   0.10 |   0.40 |   0.22 |  0.21 |  0.25 |  0.24 |  0.24 |  0.20 |  0.08 | CAD                 
  Crypto-Trade |    .   |    .   |    .   |   0.01 |   .   |  0.01 |   .   |  0.01 |  0.01 |   .   | USD                 

  SUBTOTAL     |  33.04 |  44.80 |  73.62 |  63.76 | 25.50 | 41.61 | 21.58 | 25.31 | 15.11 | 18.40 |                     

  Huobi        |  58.16 |  91.31 |  63.13 |  92.88 | 32.14 | 29.27 | 15.26 | 28.86 | 26.27 | 24.77 | CNY                 
  OKCoin       |  26.33 |  31.40 |  35.41 |  52.37 | 29.11 | 18.56 | 17.11 | 20.38 | 20.00 | 18.09 | CNY                 
  BTC-China    |   3.04 |   5.55 |   4.43 |   6.45 |  1.94 |  1.99 |  1.17 |  2.31 |  2.21 |  1.70 | CNY (NOTE 1)         

  SUBTOTAL     |  87.53 | 128.26 | 102.97 | 151.70 | 63.19 | 49.82 | 33.54 | 51.55 | 48.48 | 44.56 |                     

  TOTAL        | 120.57 | 173.06 | 176.59 | 215.46 | 88.69 | 91.43 | 55.12 | 76.86 | 63.59 | 62.96 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase is said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

(NOTE 1) On 2014-01-30, BTC-China had a burst of extremely fast, regular and atypical transactions, all with similar amounts (a few tens of BTC) and prices (~4836 CNY), adding up to about 41,050 BTC.  The burst started suddenly around 17:00 UTC and and stopped suddenly around 19:30 UTC. Presumably those transactions were made by a faulty robot trading against itself or some other robot, and did not represent actual exchange of money and bitcoins between distinct individuals. Therefore those anomalous transactions were subtracted from the BTC-China volume for Jan/30.

Yesterday (Mon Feb/03 UTC) China's volume was again lower than the previous two days, but higher than Frdays (the Chinese New Year).  AFAIK Monday was still holidays in China.

Huobi's started moving around 11:00 10:00 am local time and went on evenly until 02:00 01:00 am of the next day.

BTC-China still seems to be dead; the few transactions there may be arbitrage.

Exchanges outside China had slighly higer volume yesterday than on Sunday Feb/02, but still less than the previous week.  

(MtGOX stayed in fourth place with only 3.37 kBTC traded.)

As a resut, the non-Chinese exchanges got somewhat larger slice of the market (~1/3 instead of the usual ~1/4).

Arbitrage trading seems to be a good explanation.  If the price drops significantly at Huobi but not at Bitstamp, for example, someone promptly buys BTC at Huobi and sells them at Bitstamp, until the prices even out.

To play that game well, one needs quick reflexes (= robots) and substantial accounts of BTC and national currencies at both exchanges.  It does not matter whether your profits end up in China or in Bulgaria, you can transfer them later with bitcoins or any other method.  

Because of arbitrage trading, market prices are  usually more or less the same in all markets, with due offsets because of trading fees or other exchange-specific factors (such as transportation, storage and customs costs in the case of material goods).

That's why that 130 USD premium at Mt.GOX is so worrying.  Arbitrage traders are obviously not operating there.  And who could be buying the overpriced coins that people are selling there?

PS. Arbitrage trading is considered good because it makes one large market out of the separate exchanges, so prices tend to be more stable and the spreads between buy and sell are usually lower.

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

As I said, you need a substantial position at both exchanges (or you find an associate with accounts at the other exchange and agree to split the profits). It is not a game for small investors.  

Suppose that the effective exchange rate is 5 CNY = 1 USD.

You buy 1 BTC for 900 USD at Bitstamp when its price is too low. You send the BTC to your associate, who sells it for 5000 CNY = 1000 USD.   Now you have temporarily lost 900 USD and he has cashed in 5000 CNY = 1000 USD, so your society has made 100 USD net profit.

Later if conditions reverse he buys 1 BTC for 4500 CNY = 900 USD at Huobi, sends it to you. You sell at Bitstamp for 1000 USD.  Counting both operations, you made a 100 USD profit, he made a 500 CNY profit, and you are settled.

What if things do not even out? Suppose you were only able to do arbitrages of the first type above, and at some point you have accumulated a 10000 USD loss while he got a 70000 CNY gain.  Supose that at that moment the price is even, 1000 USD = 5000 CNY.  Then he buys 12 BTC at 60000 CNY, sends them to you. You sell them at Bitstamp for 12000 USD.  Now your net profit is 2000 USD, his is 10000 CNY = 2000 USD, and both are even.  

In ny case, each side can easily withdraw his profits in his own currency, without any currency conversion or international money transfers.

 

This CoinDesk article

http://www.coindesk.com/poll-mt-gox-withdrawal-issues/

says that


Isn't that the same as saying "we did not send those BTC, and we have no plans to do so"?

What would that mean?  

If an exchange's outstanding obligations (the sum of its client's account balances, plus pending bills etc.) are more than its assets (furniture, cash in bank, and coins in wallet), why would anyone want to buy it?

There may be buyers for their physical assets including computer hardware and software.  That may be worth a couple million US$ at most. However, no one will want to inherit their client accounts, since they are not assets but debts. I would guess that the sum of all account balances (coins and cash that they owe to their clients) is much more  than 100 million US$.  Do they have that much in their bank and wallet?

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


               !    Sun !    Mon !    Tue !   Wed !   Thu !   Fri !   Sat !   Sun !   Mon !   Tue !                     
  EXCHANGE     !  01/26 !  01/27 !  01/28 ! 01/29 ! 01/30 ! 01/31 ! 02/01 ! 02/02 ! 02/03 ! 02/04 ! Currencies considered

  Bitstamp     |   9.70 |  25.19 |  20.04 |  7.04 | 13.13 |  7.73 |  8.30 |  4.07 |  4.93 |  7.59 | USD                 
  MtGOX        |  16.11 |  10.02 |  11.82 |  7.21 |  6.60 |  4.45 |  5.13 |  2.28 |  3.37 |  5.40 | USD,EUR,GBP,AUD,JPY 
  BTC-e        |  10.38 |  21.02 |  16.82 |  6.53 | 12.54 |  4.65 |  6.30 |  4.74 |  5.75 |  4.51 | USD,EUR,RUR         
  BitFinEx     |   7.88 |  15.63 |  13.62 |  3.87 |  8.18 |  3.91 |  4.54 |  3.15 |  3.45 |  3.36 | USD                 
  Bitcoin.DE   |   0.34 |   0.60 |   0.49 |  0.33 |  0.47 |  0.35 |  0.33 |  0.35 |  0.51 |  0.27 | EUR                 
  Kraken       |   0.24 |   0.63 |   0.54 |  0.24 |  0.37 |  0.20 |  0.23 |  0.15 |  0.21 |  0.29 | EUR                 
  CampBX       |   0.05 |   0.13 |   0.20 |  0.07 |  0.06 |  0.05 |  0.23 |  0.16 |  0.10 |  0.12 | USD                 
  CaVirtEx     |   0.10 |   0.40 |   0.22 |  0.21 |  0.25 |  0.24 |  0.24 |  0.20 |  0.08 |  0.17 | CAD                 
  Crypto-Trade |    .   |    .   |   0.01 |   .   |  0.01 |   .   |  0.01 |  0.01 |   .   |  0.01 | USD                 

  SUBTOTAL     |  44.80 |  73.62 |  63.76 | 25.50 | 41.61 | 21.58 | 25.31 | 15.11 | 18.40 | 21.72 |                     

  Huobi        |  91.31 |  63.13 |  92.88 | 32.14 | 29.27 | 15.26 | 28.86 | 26.27 | 24.77 | 18.65 | CNY                 
  OKCoin       |  31.40 |  35.41 |  52.37 | 29.11 | 18.56 | 17.11 | 20.38 | 20.00 | 18.09 | 12.77 | CNY                 
  BTC-China    |   5.55 |   4.43 |   6.45 |  1.94 |  1.99 |  1.17 |  2.31 |  2.21 |  1.70 |  1.33 | CNY (NOTE 1)         

  SUBTOTAL     | 128.26 | 102.97 | 151.70 | 63.19 | 49.82 | 33.54 | 51.55 | 48.48 | 44.56 | 32.75 |                     

  TOTAL        | 173.06 | 176.59 | 215.46 | 88.69 | 91.43 | 55.12 | 76.86 | 63.59 | 62.96 | 54.47 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase is said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

(NOTE 1) On 2014-01-30, BTC-China had a burst of extremely fast, regular and atypical transactions, all with similar amounts (a few tens of BTC) and prices (~4836 CNY), adding up to about 41,050 BTC.  The burst started suddenly around 17:00 UTC and and stopped suddenly around 19:30 UTC. Presumably those transactions were made by a faulty robot trading against itself or some other robot, and did not represent actual exchange of money and bitcoins between distinct individuals. Therefore those anomalous transactions were subtracted from the BTC-China volume for Jan/30.

In the UTC day that just ended (Tuesday Feb/04 UTC), China's volume was another record low,  ~33 kBTC; even lower than on New Year's (Fri Jan/31).

Exchanges outside China, on the other hand, did slighlty better than the last two days, at ~22 kBTC.  However they too have been feeling the effects of the extended Cinese holidays: their volumes since Fri Jan/31 have been less than half of the average in the previous week.

The "experiment" of the Chinese New Year holidays seems to show that the daily volume at the exchanges outside China is largely determind by that of the Chinese exchanges, specifically Huobi and OKCoin.  See the plots below.

Beware, I tried to zoom OUT and instead it suddenly zoomed in so much that my PC froze and I had to reboot.

It is a community consensus that China does not exist, so it would be Bitstamp, I guess.

If you want to be a pariah in the community, just say "Huobi and/or OKCoin" and suggest that the other exchanges just follow them.

In any case, there is no such thing as "a price free of manipulation" for Bitcoin.  Bitcoins pay no dividends, and there are no assets that could be auctioned to refund the holders if the concept collapsed; so there is no way to compute a "real value".

The market price - what *you* can buy and sell it for - is the only price there is.  It does not matter whether the other party in your transactions is a penguin shepherd in Mongolia or a robot programmed by Skynet.

I suppose that one should exclude Mt.GOX; from what I read, one cannot actually buy or sell bitcoins there, only donate coins and cash to the owners.

That said, I too feel that the market price at the price-setting exchange (whichever it is) is "manipulated", even though I cannot define yet what the word means.

This thread too is being manipulated, of course.  And most of the posts here are copied over from the Chinese bitcoin forum by arbitrage trolls; so that the level of silliness and pontification ends up being the same on both sides. 

Speaking of Bitstamp, is there any follow-up to this Jan/31 news?
http://www.coindesk.com/vancouver-atm-operator-wants-leave-bitstamp-following-breakdown/

My two cents of Dogecoin:


Perhaps because those "good news" are not meanigful for people who are not into bitcoin already?

Perhaps because people who are already into bitcoin know that those "good news" are not that great, actually? (E.g. "another merchant acepts bitcoins" actually means "another merchant accepts cash through Bitpay or Coinbase".)


Many people who have invested in bitcoins are not that confident about it.  Presumably they rush to sell, before waiting for the news to be confirmed, because they fear being run over by a crash.


I would think so.  They seem to be the driver also for tarde volume.  With or without holidays, they account for 70% or more of the total trade volume.


I think that I see the same thing at Huobi.

Could be arbitrage traders, pulling the price back towards the other exchanges.  (Crashes and rallies seem to be much slower now than they used to; presumably it is the same cause.)


After the Dec/01 crash and the failure to recover in 2 months, many people realized that the success of Bitcoin is not as certain as it seemed before.  The China actions showed that governments can stop bitcoin if they decide to do so.  Then altcoins blasted a big hole in the arithmetic that "proved" million-dollar prices in a few years.

People are becoming aware that the price is set entirely by the market, and the market does not seem to see those astronomical prices any time soon.

Thrue believers, who would buy BTC at any price, apparently ran out of money. The exchanges apparently became the playground of speculators who only expect the price will rise enough for them to sell at a profit; or fall by a fair amount but then rebound to the current level.  Thus they won't sell for less than X + 50 and won't buy for more than X - 50. And so the price stays at X.

The buying of bitcoins for use in commerce does not seem to be enough to affect the price, and should be offset by the sale of coins by miners and merchants.

The Chinese pandas bears at Huobi took over at ~22:0 21:00 local time and undid most of what the bulls did over the last two days.

(Usually, almost all Huobi's traders are in bed at 02:00 01:00 am; but today it's 5:00 04:00 am and some are still trading.)

I have conflicting information about the bank holidays in China.  Some pages say that banks will reopen only on Feb/07, others say that they should be open today, but with reduced hours.  Which is right?

Even if they are open today, I suppose that it may take a coupls of days for deposits to reach the exchanges, right?

(BTC-China is still in zombie mode.)