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Bitcoin - The Big Short?


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Bitcoin - The Big Short?

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  #1 (permalink)
TheDude
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So this Bitcoin sounds like it will solve the worlds problems created with fixed fractional banking and fiat currency.

Interested, I look in to Bitcoin. The first thing that hits home is the fragmented market place of various exchanges. Immediately I think of arbitrage. The spreads seem ridiculously wide between platforms:

https://bitcoinaverage.com/

https://bitcoin-analytics.com/ (click on arbatrage - 2nd tab top left)

However it seems the market is 'frontier' at best, and the liquidity will not support the volume necessary to make it worth while. Feel free to disagree....

So how about trading or investing?

No point in trading - there are enough markets already right!

How about investment?

The market will be limited to 21 million bitcoins:



It would seem, they have already 'made' half the supply we will see.

Who accepts these bitcoins?

https://en.bitcoin.it/wiki/Trade

Basically, a few rinky dink retailers you've probably never heard of.

This leaves bitcoin as a speculative play as you really cant do much with them. With 50% of the balance already in circulation, and no one really accepting them - other than i-net nerds, where's the value beyond novelty?

How can I short? The 'exchanges' dont seem to allow short selling?

What am I missing?

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  #3 (permalink)
 Big Mike 
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Use the existing thread please:



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  #4 (permalink)
 Big Mike 
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@TheDude,

Now that I have created a new subforum on the site for Bitcoin Trading (expanding from it's single thread previously), I have re-opened this thread if you wish to continue your posts.

https://futures.io/bitcoin-trading/

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  #5 (permalink)
Pedro40
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The big unknown with bitcoin is when/if the US government is going to outlaw it. And that is more a when than an if. It could be pretty much anytime. Now the bitcoin trading seems to be moving to China, so although a US ban (for retailers) would cause a huge drop in price, I think it would somehow recover and keep going on, but on a much lower level.
The security is still so complicated that I don't see Average Joe using it (without being ripped off) anytime soon. Also volatility is so high, that it is still a specualtion/investment vehicle than a currency. Until volatility dies down it can't function as a currency well....

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  #6 (permalink)
Pedro40
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For bitcoin newbies, the best source of info and answers would be Reddit's bitcoin subforum. On Mondays, you can ask any kind of basic question and they will answer it:

Moronic Monday: Ask all your bitcoin Questions! : Bitcoin

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  #7 (permalink)
Pedro40
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And this is why I don't trust bitcoin. How to lose all your savings even with using 2 steps authorization:

I just lost 301BTC ($70,000+) on blockchain.info. USE 2FA / Cold wallets! : Bitcoin

"Today, as I was halfway through my workout at the gym, I get a notification on my Android phone: "You have transferred 301 BTC to 1HJ3tECDZA4Zpgux1qK9AXKpRYZWjXXK4"
Ugh. My entire savings gone. I put nearly every paycheck into buying bitcoins through Coinbase - not one of the early gpu miners =(
I had used 2 factor authentication with Coinbase, but did not have it enabled for blockchain.info, where I had transferred the coins to."

An analogy with banking:

"Think about how much a lot of you hate banks for a moment. Now pretend your bank no longer has FDIC insurance, has only been in existance for a couple of years, and there's no way to dispute a transaction. That's what an online wallet is.

There's literally nothing you can do if your account gets hacked, the online wallet service goes bankrupt (perhaps due to legal trouble or if their whole infatructure gets hacked/compromised somehow), or they simply decide they can make a fuckton of money by running off with everyone's coins."

-----------------------------------------------

The higher BTC's value is, the bigger the incentive for hackers to mess with your account.

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  #8 (permalink)
TheDude
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Pedro40 View Post
And this is why I don't trust bitcoin. How to lose all your savings even with using 2 steps authorization:

I just lost 301BTC ($70,000+) on blockchain.info. USE 2FA / Cold wallets! : Bitcoin

"Today, as I was halfway through my workout at the gym, I get a notification on my Android phone: "You have transferred 301 BTC to 1HJ3tECDZA4Zpgux1qK9AXKpRYZWjXXK4"
Ugh. My entire savings gone. I put nearly every paycheck into buying bitcoins through Coinbase - not one of the early gpu miners =(
I had used 2 factor authentication with Coinbase, but did not have it enabled for blockchain.info, where I had transferred the coins to."

An analogy with banking:

"Think about how much a lot of you hate banks for a moment. Now pretend your bank no longer has FDIC insurance, has only been in existance for a couple of years, and there's no way to dispute a transaction. That's what an online wallet is.

There's literally nothing you can do if your account gets hacked, the online wallet service goes bankrupt (perhaps due to legal trouble or if their whole infatructure gets hacked/compromised somehow), or they simply decide they can make a fuckton of money by running off with everyone's coins."

-----------------------------------------------

The higher BTC's value is, the bigger the incentive for hackers to mess with your account.

Good points.

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  #9 (permalink)
 hlatham 
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Bitcoin more than doubles in value over a month | Mail Online

thought this article may interest you. if it starts becoming more widely accepted then the only way is up because of the lack of new supply.

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  #10 (permalink)
 suko 
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Fascinating interview with Brad Rotter on Bitcoin.

Trend Following with Michael Covel: Ep. 177: Brad Rotter Interview with Michael Covel on Trend Following Radio

In his opinion it's too late for governments to stop it, because it is basically the same thing as the Internet.
Also, the German government has now authorized it for use in some kinds of payments and Chinese Google
BaiDu is now accepting payments in it. Which is why it's skyrocketed.

Rotter thinks it will go up parity with the dollar, retrench and then head up further as "the biggest
financial instrument in our lifetime." hmmmmmm

Then he says it's all about finding a way to secure your Bitcoins, which is why he's investing in Net
security companies.

So maybe the smart money Bitcoin play is picks'n'shovels?

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  #11 (permalink)
Pedro40
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>Bitcoin more than doubles in value over a month

And losses 25% in a few hours....

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  #12 (permalink)
TheDude
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Mining bitcoins is a tough gig - it's become so competitive that the hardware needed to compete is so expensive that if you mine a few, it's will not cover the costs.

I imagine every corporate IT manager in the world is using his companies server farms to mine these things and putting the coins in his own wallet.

I'm still a short.

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  #13 (permalink)
 Big Mike 
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TheDude View Post
I'm still a short.

Stop, target?

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  #14 (permalink)
TheDude
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Stop, target?

Mike

Well, I'm still trying to figure out how to short, so in this instance, consider it a 'short' in the terms of a long only money manager - ie in cash.

However, given 7 years ago, 10,000 bitcoins would buy a pizza, and now 10,000 will buy a Manhattan penthouse, I'm sure you're very pleased with your bitcoins.

Why not lend them out to me so I can short? e-mail me them so I can sell them, then I'll buy them back in 2 years and give you 10% of whatever I make. Thats a better return than the risk free rate, so I know it will make sense to a clever guy like you.

Can you PM them over on the forum?


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  #15 (permalink)
Pedro40
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Well, correctly saying, you are long only. If so, it is not a bad idea to follow the current price with a limit order 20-30% below, that would give you a sweet buy in when it crashes. Just over the weekend it was down 25%+ but since it has recovered.

There are only a few brokerages where you can actually short it...

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  #16 (permalink)
TheDude
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Please name them!!

Mt Gox is going to be shut.
Bitstamp doesnt allow it. My emails were answered until I asked about shorting.

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  #17 (permalink)
Pedro40
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From the top of my head, they allow to short:

https://www.kraken.com/

Also https://www.bitfinex.com/‎

and 796.com offers futures

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  #18 (permalink)
 addchild 
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fiatleak - watch the world's currencies flow into BTC in realtime

.
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  #19 (permalink)
 Big Mike 
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Still short @TheDude?

Bitcoin just hit $670.

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  #20 (permalink)
TheDude
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Still short @TheDude?

Bitcoin just hit $670.

Mike

Enron had a high valuation too once upon a time.

Now try converting your beloved Bitcoins back into USD.

I think you'll find all they are good for is buying socks and drugs. You wont need socks in Ecuador or where ever it is you are moving to, and the drugs are cheap and plentiful without the need for some gonzo currency.

Meanwhile, back in the real world.....

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  #21 (permalink)
Pedro40
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Price is down 50% in one and half day. What goes up must come down...

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  #22 (permalink)
 Big Mike 
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Pedro40 View Post
Price is down 50% in one and half day. What goes up must come down...



Down from the high of 900, yes. But it is still trading at 600, a significant increase over the last 7 days.

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  #23 (permalink)
 suko 
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Looks like Brad Rotter was right about Bitcoin reaching parity with gold.
It seemed like a farfetched idea just a month ago.

Now for the pullback.

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  #24 (permalink)
 sandptrader 
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The Price is Moving Much Higher over the last few days....is there Options on this thing

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  #25 (permalink)
 suko 
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This kinda gives a new meaning to "bitcoin mining:"

"...the prospect of a painstaking hunt through a massive landfill site in his home city of Newport, Wales, he told BBC television...When I went to the tip the manager took me up to the current landfill site and when I saw it - it's about the size of a football field - my first thought was 'no chance'," he said....The manager explained that things that were sent to landfill three or four months ago could be three to five feet (1m-1.5m) deep...Large-scale searches of the landfill site - including those for police evidence - usually involve up to 20 workers with digging equipment and dogs, he added."

heh

Bitcoin trove lost after computer drive binned - Business - NZ Herald News

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  #26 (permalink)
 sandptrader 
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In September 2010 this chart shows Bitcoin at .007= 7 cents/pennys....why did i not buy $ 100 worth-about 1400 coins and hold at least till now
For every $100 investment it would be worth more than $1,715,000.
i am posting the Chart when Bitcoin started trading based on this chart i found.
Also posting Current Price chart= 2 charts.

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  #27 (permalink)
 suko 
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Trading in crypto currency pairs:

https://btc-e.com/

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