Bitcoin run-up

MJB
By MJB on Wed, Jan 4, 2017 - 9:37pm

I can't believe this group isn't going nuts! Bitcoin was the best performing currency of 2016 and has had a great start to 2017.. People I work with are starting to notice and asking me questions because they know I got in a few months back. I hear a lot of alt coins are riding bitcoin's tail. Ethereum I know has.. 

Get ready for $2,000 BTC by mid feb. I am personally looking forward to the day when BTC=1oz gold, I have no clue what will happen but have to think that they start being very correlated. Will it be the moment that gold manipulation is finally noticed by the mainstream? 

18 Comments

skipr's picture
skipr
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flying high

Don't worry MJB, I'm pretty hyper too.  I was concerned that I may have screwed up by exchanging 30% of my BTCs for ETH and DASH a few weeks ago.  Well they are taking off at least as fast as BTC, at least for now. I got into it seriously about 6 months ago and I've now doubled my dollars without buying any more BTCs.  At $2000, I will have quadrupled my investment.  A 15% increase in a few days is too damn good and a bit scary.  Is the cliff coming up soon?  Are the paper gold price manipulators powerless with BTCs?  It seems like the only tool in their arsenal is relentless propaganda.

Keepkey's Chrome support of ETH is in beta and DASH is a few months away.  I have been using the Exodus wallet for the exchanges.  It has been having issues maintaining the network connection lately.  I'm starting to switch over to Jaxx.  I hear that Jaxx is coming out with their "Cube" hardware wallet in the summer at the earliest.  The competition between it and Keepkey-Multibit will be interesting.

MJB's picture
MJB
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Ratio Trading?

That is GREAT trading my friend! I am not as knowledgeable about alt coins although when mrees999 posted Eth = Oil For Next Paradigm I bought 100 ETH so as not to miss out. They are currently sitting in my coinbase account (until a hard wallet has proven to work). I will likely continue to buy but the hardest part for me is selling/converting. 

As always buy the dips.. BTC down big over night.

davefairtex's picture
davefairtex
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Armstrong on Bitcoin

Armstrong projects that the Chinese government will be forced to regulate Chinese bitcoin trading simply because they have no choice - if and when they impose capital controls.  I've experienced the GFWC, and its pretty lethal in its ability to control traffic.  My sense is, if the Chinese government wanted to "turn off" bitcoin traffic in China, it wouldn't be very difficult.

And if that happened, the bottom would drop out of bitcoin.  It would probably drop through 100 in a heartbeat.  Bids would simply vanish.

Bitcoin exists only because the gang in charge has decided to ignore it for now.  I can't say for sure when China will pull the plug, but I believe they will - as soon as they decide to seriously restrict capital outflows.  That probably comes alongside "fixing" their banking system.

I absolutely would not have any substantial amount of money in bitcoin, given that its current value is underpinned by Chinese activity, which can be turned off with a flip of the switch.

Contrast that to a little gold bar - where there is no centralized control possible.  At some point, the gold bar will have its day.  I know, I'm a luddite.  I also am terrified by the IoT too.  I don't want "smart fridges", or smart TVs, or really "smart" anything.  It all sounds like a grand opportunity for all sorts of spying to take place without your knowledge - and you are the one placing the sensors inside your home.  Sheesh.

https://www.armstrongeconomics.com/world-news/taxes/bitcoin-what-next/

The Chinese have been buying bitcoin onshore, selling it offshore for another currency and then moving the money to a bank account. This is how the Chinese individuals can taken cash out of the country circumventing all regulation. The Chinese  government has been strengthening requirements for citizens converting their yuan and with Trump coming into office, China fears that lower values for the yuan will become a trade war even if the government is not activity trying to depreciate the yuan for trade. Conversions of yuan are already subject to a quota or currency controls in an effort to curb capital outflows.

Bitcoin has been the escape method for capital fleeing China. With the looming trade war on the horizon, the Chinese government will have absolutely NO CHOICE but to come in and regulate Bitcoin when it’s citizens now account for 98% of all trading. From a regulatory perspective, the days of passive treatment of Bitcoin may come to an end. Bitcoin has soared only because it has been the mechanism to obtain foreign exchange and take capital out of China. This can easily be called illegal operations such as money laundering to justify closing that window.

MJB's picture
MJB
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Posts: 117
Respectfully disagree with Mr. Armstrong

I am of the opinion that China goes the other way and not only accepts BTC albeit forcibly but expands the internet capability so as to make it even more accessible in rural parts of the country. I am no expert on China’s politics but I do believe it is a command and control economy.. what happens when the commands are no longer followed? It is further my understanding that China’s power structure is delicate. From the top down, each layer higher owing their power to the tier below.  A lot of hard working Chinese entrepreneurs have made small fortunes during China’s recent rise. Does Mr. Armstrong believe these people will sit idly by while their fortune loses its purchasing power? As stated China is capable of controlling the internet but at what cost? Social and political unrest? Chaos in the streets and markets? I am left thinking that there will be difficult decision to be made by the Chinese Government; it’s easy to flick a switch, it’s much harder to bare the consequences of that switch being flicked..

The advantage to Armstrong’s argument is that BTC is not even KNOWN by the masses, let alone are they participating in it. If the idea of ‘digital gold’ takes hold BTC will spread like wildfire.

Simply a humble opinion.

davefairtex's picture
davefairtex
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keep dancing

MJB-

I get the sense that BTC is being used by rich Chinese people to send their money overseas.  That fact alone will limit the concern of the Chinese government about "riots" from shutting down BTC transactions.

After all, its the workers who lose their jobs and/or don't get paid that end up rioting.  The rich people who are suddenly unable to send their money to their overseas bank accounts - they don't riot.  They just look for another way.  Its only people with nothing to lose that riot.

Have you ever seen a "rich people riot" before?  You haven't.  That's beacuse they just don't happen.

When things get serious, the Chinese government will shut down all the easy ways to move money offshore.  I'm confident of this because that's what they are already doing - shutting down more and more of the various ways that the rich people are currently using to move money offshore.  When they escalate their efforts, BTC will just be one of the casualties - along with anyone who remains long BTC when this event occurs.

Bears win, bulls win, and the pigs get slaughtered.

Or, in the immortal words of Chuck Prince, the disgraced former CEO of Citibank, who said the following right before the subprime market locked up in 2008:

... the party would end at some point but there was so much liquidity it would not be disrupted by the turmoil in the US subprime mortgage market.

He denied that Citigroup, one of the biggest providers of finance to private equity deals, was pulling back.

When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” he said in an interview with the FT in Japan.

As we know, "complicated" turned into a 300 billion dollar bailout. And Mr. Prince lost his job.  That's the penalty for dancing too long.

MJB's picture
MJB
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Thinking...

Dave,

I can agree with you on all fronts but there are a few comments you make I’d like to put some more thought in.

Have you ever seen a "rich people riot" before?  You haven't.  That's because they just don't happen.

No I haven’t you are correct, but I did see a lot of VERY rich people in this country scare the shit out of our Congress in 2008 so that the VERY rich people didn’t lose anything. See, very rich people don’t have to riot, they just get what they want. At least that’s how it has been going for my short life.

How does this tie into China? Well again it is my understanding that order is kept from the top down. The people at the top keep the people on the next tier of power happy, this happens all the way down to local government. What happens when that lowest level of power isn’t happy anymore? They gripe to the next tier up and so on. Forget about the common Chinese person here think only about those in power. As Mr. Armstrong suggests President Jinping could kill the internet and outlaw BTC. Sounds an awful lot like North Korea to me. How long will he retain power if the lower tiers are in revolt because they are suffering economic hardship? I’m not saying BTC is worth the Chinese revolting but they have had a taste of freedom and I think they like it..

There are quite a few rich Chinese people, one of the byproducts of creating thousands of miles of new roads, raising cities from nothing and becoming a world leader in manufacturing is you can’t help but create new wealth, even in a Communist country. I am not talking the SUPER rich, more the person that makes the equivalent of $100-200K in the US. I will look up how many people there are who earn that in China. I think it’s important to look at the actual number here as opposed to what % of the pop earns over 100K. My theory goes that they are the people who have the knowledge of what BTC is and the ability to buy. Weather they actually act on the buying opportunity is something different.

When things get serious, the Chinese government will shut down all the easy ways to move money offshore.  I'm confident of this because that's what they are already doing - shutting down more and more of the various ways that the rich people are currently using to move money offshore.  When they escalate their efforts, BTC will just be one of the casualties - along with anyone who remains long BTC when this event occurs.

I could see BTC taking a hit in the short term because of this, it DID happen already back in 2011 when China put restrictions on BTC. The Yuan will collapse before the dollar, maybe even before the euro. What will be the actions of investors when this happens? Investors and average people who are paying attention will buy THINGS, getting out of fiat currencies (I think we agree this is already happening). They are going after the first layer of wealth Chris talks about, not going after the claims on that wealth. Are you suggesting that China’s super Elite will try and stop the masses from buying things? Well again look at North Korea as an extreme example, their economy (and country) stinks!

I can also turn the conversation to India and Venezuela but perhaps another time.

I’ll leave with this.. the BTC market is $17.5B give or take. The derivatives market is $1.5Q, 85,714X bigger than BTC. Why care about something so insignificant? It is the idea of what BTC is and what it represents that will keep people buying..

Maybe I am thinking about this the wrong way, either way thanks for the insights!

MJB's picture
MJB
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News out of China

Three of China’s largest BTC exchanges implemented a 0.2% trading fee. This has had an effect on volume but not particularly on price. I like the move because speculation was starting to overrun the market. I have also heard that while a trading account is open, transactions aren’t being added to the blockchain. I assume this is very similar to our paper PM markets. If BTC traders suddenly wanted to hold their coins there wouldn’t be enough. YIKES!

http://www.coindesk.com/bitcoin-price-china-exchange-fees/

I have also heard this about coinbase. A person only takes possession of the BTC once they transfer it out of their coinbase wallet and onto a personal one.

I have taken advantage of the recent downturn to lower my cost per coin to $790! I believe this is just the beginning of great things to come. More MSM press will help and I really wonder what is going to happen when BTC is on parity with gold. We have gotten close twice, can the third time be the charm? I am continuing to hear many in the hedge fund community (big money) are struggling to find large amounts of BTC (10-50K BTC), early adopters in the US are not sellers here…

MJB's picture
MJB
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BTC ETF Denial

https://www.ft.com/content/eb09142f-602b-367e-b41a-995f3053cc17

Having major issues signing into Coinbase. Price fell below $1,000. A lot of people buying/selling.

mrees999's picture
mrees999
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Posts: 431
Poking in for a visit

China finally did us a favor that long time bitcoiners have been asking them to do for years.  That was to finally regulate the fake trading and price manipulations. 

I wrote about this years ago,

https://bitcoinmagazine.com/articles/know-exchange-part-three-1393126328/

You saw the price drop a bit from people who don't understand bitcoin...but then the people who do understand the technology thanked them very much for the price discount and picked them right up.  I bought up the sale.

The Chinese came out and said they like bitcoin and like having the miners inside their country. Bitcoin is a drop of water in the sea of ocean for all the talk about it being some kind of escape vehicle.  They are still limiting the withdraws while they get caught up on the AML KYC. Anything that helps bring more stability is a good thing.

 

mrees999's picture
mrees999
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Posts: 431
Eth Double

Nice move  MJB!

Eth at $20 Is a nice start.  With all of the work on DAPPS that are being done - ETH is the platform they will run from, you need ETH to buy them (ERC20 complient coins)

 

The new organizations are lining up with some great ideas - some likely scams. Here's a site that rates them for review and let's you know when the ICO (initial coin offerings) will be held.  The new generations of Ebay, Amazon, and Facebook are going to be found in here somewhere.

http://icorating.com/

 

Many can still be had for pennies but do your research.

 

Good luck!

 

mrees999's picture
mrees999
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Posts: 431
So much for the post- ETF crash

Blink, and you missed it. Headlines read that it fell below $1000... Must have been just a minute or two as some of the websites went down with people madly buying and selling. By the numbers, people stashed their BTC into Ethereum to ride out the storm and ETH was up about the same percentage as BTC was down.

 

At the end of the day...BTC value changed about 5% which is pretty standard fare in the world of Bitcoin. Yawn. It's still up about 3x over the same time last year.

 

With the Ethereum problems from last summer\fall behind it, it's now nearly 18 months old. Decent size programs take about two years of development before they hit the market. Because Ethereum created it's own brand new language (Solidity), some of the more advance programs\contract\applications will start appearing now, but will be getting better and more advance throughout the year.

The value in ETH has been purely speculation up until this point. Its role as the new "Oil" hasn't even hardly begun. With the announcement of the Ethereum Enterprise consortium from Microsoft and several dozen other big business names - they all committed to build their new economic models on the Etheruem blockchain. They will all build on private sandboxed versions, but eventually they will all want to connect to each other, so they will be doing that on the public open-source main chain.

Ethereum could be measured in hundreds of dollars in the next couple of years.

 

Buckle up,

 

 

MJB's picture
MJB
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Posts: 117
Impressive moves

ETH has been on a tear lately, started before the big announcement about Microsoft and others adopting it but when that news broke ETH shot up.. The move has not been as impressive as DASH though. I have no platform to but DASH so I have missed that rally.

Read an interesting article that mentioned college students with small trading accounts preferred the 'cheaper' ETH and DASH platforms. I don't think these investors have enough buying power to move the market but reminds me of silver vs gold buyers. People with limited funds wanting some type of exposure will choose the more affordable (higher quantities) 90-95% of the time. At least that's my 2 cents. Thanks for your thoughts and analysis  mrees999, always enjoy reading them!

 

 

 

 

skipr's picture
skipr
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Joined: Jan 9 2016
Posts: 168
ETF ETH DASH

Hello fellow Crypto Crazies

Well it looks like the BTC ETF had as much long term influence on BTC as the halving a few months ago.  I'm glad it didn't get absorbed into the system's black hole since I assume it could be manipulated if it was.  Am I off base here?

What I'm wondering about is why DASH has been so explosive lately.  For almost a year it seemed to be tracking BTC, with the DASH/BTC ratio varying roughly between 0.01 and 0.025 in a sine wave like pattern.  So I exchanged my DASH when it hit 0.02 and a few days later it started to REALLY take off.  It's close to 0.06 right now.

I have also been tracking the DASH/ETH ratio.  It looks to be moving linearly upwards, though I haven't checked it lately.  Is DASH and ETH the 2nd gen BTC?

MJB's picture
MJB
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Posts: 117
Bubble

Don't you think ETH and DASH have moved to far to fast? Mrees really likes ETH long term. Short term I'd say both ETH/DASH have more upside than BTC given all of BTCs recent fork talk. I'd tread lightly though. Personally holding on both ETH and BTC positions, not adding to them and no DASH exposure. Would like to scoop up some more ETH around the $25 level and same for DASH. We will see if they get back down there.

Silver is on sale as always :)

reflector's picture
reflector
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Joined: Aug 20 2011
Posts: 279
hope you are right about ETH and DASH

hope you are right about ETH and DASH,  i've been looking into them but haven't bought any yet, so i would really like a pullback about now. dash is back up over $100 today. seems like just yesterday that i was shocked to learn that dash had jumped from $12 to $32 within a month or two.

ETH looks like it's consolidating around $40, looks like a wedge, i am hoping it breaks to the downside.

still holding a bunch of BTC and trying to make sense of the possible bitcoin fork.

 

bowskill's picture
bowskill
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Posts: 78
ETH wallet recommendations

Hi mrees,

Thanks for alerting us to ETH. I converted my bitcoin to it a couple of weeks back - at just the right time as it has turned out.

Would you care to recommend an ETH wallet?

I am looking for a Windows software wallet. I tried Mist but cannot get it to work. I never had any trouble setting up bitcoin wallets but have had no luck so far with ETH.

I might eventually get a Nano hardware wallet but for now, I just want to get my ETH off the exchange asap.

Thanks.

mrees999's picture
mrees999
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Joined: Aug 16 2013
Posts: 431
Eth Wallets

Hi Bowskill

The Mist wallet is cool but it downloads the entire blockchain. The blockchain is pretty big now and if you have hiccups during the chain download it can make one of the blocks corrupt and it won't finish catching up. If you are technical, there are commands to run to fix it. If you aren't then you can stay with the "light" wallets. Mist will get better with the next release of Ethereum later this year. Then you will start to see many of the first the Dapps appear for it.

I just got a ledger nano to go with my Tezor and Keepkey so I could have one of each of the hard wallets.  The keepkey is my favorite for ease of use as it's got a nice big display. But it is a little slower at adapting to newer technologies. 

 The trezor was first but I don't like its tiny screen. I have to pull out my magnified glass to read the confirmation addresses.

The nano s is interesting. I understand they put in a 2nd layer secure chip to help prevent against 'electron monitoring of the silicon of the chip itself'. Which is now a thing when breaking into secure computers. They are usually the first to adapt in new technology and so it accepts most-if not all, of the ERC20 based ethereum tokens like Golem, Iconomi, Auger etc.  There are many more of the Ethereum based coins for various Dapps coming down the road.  The other wallets will likely catch up but nano seams to always lead.  The nano is very small as well - but they do have a bigger ledger blue but it's still a bit pricey. (being relative if you have hundreds of thousands of dollars (or millions) stored in it.

Anybody there at the beginning of ethereum launch investing one $500 bitcoin at the time of the first two weeks in the crowd sale now has crossed into six figures if they held on to the 2,000 token they received. That's over a 20,000% return if my math is correct.  Not too bad of investment.

Now if you really want to do what the cool kids are doing - download and play with the 'metamask' wallet for Chrome.  This is the wallet a lot of the newer Dapps will use automatically when it's detected.  Once you have that going - all kinds of new doors will open to amazing possibilities of the future. You'll be able to access maker market, the new ethereum-based gaming systems (See tokens "GameCredits" and "First Blood" and read about their road maps.) New web interfaces are going to utilize it for automatic payments when authorized and even advertisers paying YOU to see their adds.

This is all just the beginning boys.

Remember Bitcoin reached $50 in March 2013 before hitting $1000 in December of that year. Will history repeat?

 

 

bowskill's picture
bowskill
Status: Bronze Member (Offline)
Joined: Mar 16 2012
Posts: 78
Nano S

Hi mrees,

You were right about Mist. I just had to wait for the blockchain to download. But I have ordered a Nano S anyway. Yes 2013 was a good year but 2014 was horrible for bitcoin. The recent runup in Eth has been staggering but I know what cryptocurrencies are like - it could all evaporate very quickly. At least an offline wallet removes some of the risk.

John

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