What do you think of this analysis of bitcoin dip?

[Suzu]

Here's a wide-ranging discussion of why bitcoin has lost so much of its value lately. I'd like to hear your comments on it.

http://youtu.be/lMfoFlJhcck?t=1h5m49s

[Suzu]

After 69 topic views, no one has an opinion to share? I see many good points in the analysis. I hope the outlook is better than predicted here. What do you think??

[willwash]

Perhaps if you provided a synopsis of the arguments being made you might get some more responses. I tend to skip threads that open with just a link. Collins gets crucified for this offense all the time.

Just my .02

[brandon]

Been too busy to follow bitcoin for hte last few months but I suspect it's just a lot of the hype and novelty wearing off. People who bought in trying to get rich quick on the next bubble probably are losing their patience and selling it.

[Suzu]

Perhaps if you provided a synopsis of the arguments being made you might get some more responses. I tend to skip threads that open with just a link.

Sorry. I wonder if I can do justice to the task of summarizing. I might, if I listen again and take notes while doing so. I wouldn't mind, since I find the arguments compelling, so I may, but since it's about 20 minutes long, and with pauses to type notes, plus write a summary to post here, it would take at least an hour, I have to put it off, as I'm leaving shortly and will be out until late in the day.

[William Tell]

Been too busy to follow bitcoin for hte last few months but I suspect it's just a lot of the hype and novelty wearing off. People who bought in trying to get rich quick on the next bubble probably are losing their patience and selling it.

Pretty much what I think.

[helmuth_hubener]

I listened to it.

I think that bitcoin is a highly speculative market.
I think that no one actually knows the causes of bitcoin's price movements.
I think that Peter Schiff has no idea why bitcoin has dropped lately.
I think that Peter Schiff has no idea whether bitcoin is going to drop more, or instead go up.

His main substantive reasoning was this: Bitcoin is a victim of its own success. As more and more merchants accept bitcoins, that makes it easier and easier for owners of bitcoins to use them to buy stuff. Virtually every merchant that accepts them -- including him -- as soon as they get the bitcoins immediately turns around and sells the bitcoins for dollars (or their local currency). So unless there's a lot of new demand, and there hasn't been, the merchants' continuous selling of all this bitcoin is driving the price further and further down and will continue to do so.

What do I think about that? Well, it's a little story to tell yourself. We humans love narrative. But actually, Peter Schiff does not know why bitcoin is down, and neither does anyone else.

[Shane Harris]

Silver and Gold have been sliding down for years now. I have always seen Au, Ag, and BTC as long term markets. Show me the price of Bitcoin in five years.

[muh_roads]

You can't trust the analysis of people that sell metals. They're almost as bad as central bankers in some cases because their metal monopoly is now threatened by something that requires no middle-man.

If Bitcoin ate into 10% of the pie chart some day that would normally invest in metals, that is a huge loss for those that make their living on fees from selling those people metal.

[helmuth_hubener]

You can't trust the analysis of people

I would just stop right there, my friend. Just stop right there.

[Xenliad]

I don't know very much about markets, but from what I've been reading from other people they seem to think that all of the merchant adoption lately has made a ton of people "sell" their coins by trading them for products/services, at which point the merchants dump them for fiat. (Critics of that view also say that whenever there's a seller there's a buyer, so I'm not sure what to think.) It seems like there needs to be a lot more of people receiving their paychecks in Bitcoin, or at least a fraction of their paychecks, in order to balance out the dumping.

[kpitcher]

I don't know very much about markets, but from what I've been reading from other people they seem to think that all of the merchant adoption lately has made a ton of people "sell" their coins by trading them for products/services, at which point the merchants dump them for fiat. (Critics of that view also say that whenever there's a seller there's a buyer, so I'm not sure what to think.) It seems like there needs to be a lot more of people receiving their paychecks in Bitcoin, or at least a fraction of their paychecks, in order to balance out the dumping.

That seems like the logical conclusion... but if anything has shown with some of the hype swings logic doesn't always work with BTC. It's heavier on the sellers than the buyers because of adoption of the auto-sell-for-fiat services.