Gold Vs Bitcoin... Why bitcoin wins.

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mrees999's picture
mrees999
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When is it considered "closed"

I Appreciate your charting, but I'm curious as it trades worldwide and never stops - when do you consider it "closed"

 

Thanks again,

 

mrees999's picture
mrees999
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Don't worry - life goes on

Guess what?  The internet still works when your lights are out.  It will come back on, it always has.  Besides you've got some silver too right?

 

mrees999's picture
mrees999
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Bitcoin Sputnik moment?

With all the news since your post - I wonder if you've changed your mind yet.  Do you see governments attitude quickly changing as they realize the potential and are scared the other countries are all moving full steam ahead and don't want to be left out.  I feel that the tide has shifted and China and the US is now in a news arms race to be the leader and call the shots. The general message coming from Washington inside circles is to embrace it an run - quickly. The US can't afford to loose their last advantage over the word...inovation.  Did you see how much money and new business ventur capital rushed in within the few days of the senate hearings?

 

I'm sure I've read that  Palatir Technologies ( http://en.wikipedia.org/wiki/Palantir_Technologies  )  is working with In-Q-Tel, (http://en.wikipedia.org/wiki/In-Q-Tel) are both working with the CIA and have interviewed some of the lead programmers of the bitcoin open source to learn more about it. This information corroborates what was said in the senate hearings about the "tools" they have to track down the bad guys that use bitcoin.

The new attitude is "if you can't beat them...join them" - before the other guys take the lead,. Somebody has lit the fire under the US government and just pointed out that no US digital currency trading system exists in the US and pointed to the top ten all being outside of the US.  The feeling is that we've just had another sputnik moment.

 

The best way to predict the future is to invent it. (Alan Kay - 1971)

mrees999's picture
mrees999
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Do you have to take sides?

Not any of my friends that own bitcoin has sold all their gold or silver to buy it.  There are advantages to keeping your 4,000 year old kind of money.  Gold is insurance even though it has lost its value from $1900 to $1250 and its price is largly dictated by big government and central banks. But we all agree bitcoin can make you rich enough to buy more when you need.

 

For example the $1600 one ounce of gold last January diverted to buy 133 bitcoins instead. Now sold would buy you 120 ounces of gold instead at the current prices.  Just think about that. Would you prefer to hold a coin?  or 120 coins?  It's pretty easy math.

 

mrees999's picture
mrees999
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Fund managers, institutional investors - get ready for the rush.

This might help big institutional purchasers and mutual funds etc. The more money in - the higher the price will go.  When you get the first few funds starting to skyrocket and their valuations go off the charts, all the other funds will pale in comparisons and the managers will be scrambling to play catch up before all their base support flees to the funds that are making a killing.  That competition will drive up the price even further. I can easily imagine a bitcoin priced in the hundreds of thousands as a result. Or possibly spill into the alt digital currencies if bitcoin becomes unavailable due to high demand. (I've already experienced this)

 

I do see banks eventually playing an important role of lending to create capital to start new businesses just as they do with the dollar. They do have useful functions  so some will still be around. But their business models will look vastly different.

 

Hope this helps!

 

 

davefairtex's picture
davefairtex
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a "close" below 1050

So what do I mean by a "close" below 1050 in an instrument that never closes?

I'm looking at the 1-hour chart.  If one of the candles on the 1-hour chart ends the time bucket below 1050, it will be problematic.  A candle with a spike below 1050 and back up again (we'd call that sort of candle a "hammer" or a "doji") doesn't count, since that shows there is serious buying pressure below 1050 - enough to bid the price back up above it rapidly.

But one of those nasty big red candles that shows solid selling and not enough buying to stem the move down - that's just selling pressure, money flowing out, sellers overwhelming buyers, etc.

So - "an hourly close" below 1050.

davefairtex's picture
davefairtex
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bitcoin price tracks "google trends"

I have noticed that the price of bitcoin seems to track "google trends" interest level.  Gold did something similar, although not quite as closely.  Apple stock most definitely tracked its google trends results.

So regardless of whether or not bitcoin is "the new new thing" (to quote a book from the dotcom boom) as interest in bitcoin wanes, so does the price.  And the opposite is true too - the higher the interest in bitcoin, the higher the price.

FWIW.

Only problem is, google trends doesn't update frequently enough to be useful for buy/sell signals in bitcoin.

troof's picture
troof
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The road to irrational exuberance?

mrees999,

I appreciate all your information on Bitcoin.  Obviously, there is a future trend here but probably not in the direction that you expect.  However, I can't help but note that, in the annals of investing, the exuberance of your tone in the present has historically always been followed by the silence of disappointment in the future.  These are exciting times for you, it is obvious to see, but you may wish to gird your loins against the inevitable and not invest too much emotional energy into an electronic entity that will ultimately be undeserving of it.

davefairtex's picture
davefairtex
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BTC through 1050 support

Now 1050 should act as resistance - selling pressure will emerge as the price bounces back up to 1050 on the rebound.  The 1050 level is a good place to go short - or a good place to sell.

The selling on the breakdown was massive and sustained - 4 hours of high volume selling.

davefairtex's picture
davefairtex
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btc bounce off 950 support, resistance 1100

On the rebound, 1050 was no problem - selling didn't emerge until 1100, and/or buying petered out.

However 950 looks to be decent support.  We need a bit more time for the pattern to develop, currently we're trading in a range.  A break above 1100 is bullish (longs will jump on board, afraid to miss out), and a break below 950 will lead to more selling, where longs will become afraid of losing the money they've already made.  Its all about fear & greed, as always.

I have to say, BTC is a lot of fun to watch.

mrees999's picture
mrees999
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Posts: 435
Troof line recognized

Thanks for your advice troof. Believe me, I've risked very little of my own money. Unless it tanks 95% I'm playing with pure profit. It's the luxury of buying early. At least as long as it stays above $70 per coin.  I am not a trader - and I never will be. That's too much stress for me and I would have to be glued to my laptop all day.  I'm a buy and hold kind of guy. They are the ONLY ones that have guaranteed success so far.

 

My interest goes way beyond the money aspect of it. It represents a completely new paradigm that fascinates me.  It requires one to completely rethink everything. I live for this kind of challenge. It's just a bonus that it also could make me very, very wealthy in the process. Being a student of history - I find no parallels to compare in it within the entire complete broad scope that goes way beyond money. Most of the responses I've seen here are very narrow in scope only looking at the money part of it. As one finds themselves more curious as to what I'm referring to, they have also found themselves on the cusp of an entire new world. It's.....mind blowing. And very rewarding to me when they've crossed that threshold.

 

Even if the odd chance that it goes to zero - I've risked so little that I won't feel it.  I still hold my gold and silver, My 401k, pension, land and equity and most importantly my friends and family. They are the real important things in life and the ones that make us truly happy and grateful. My recommendation to anybody follows the careful advice of those that are maintaining the bitcoin network and planning future ability to the protocol (yes it's a protocol not unlike HTTP - created the world wide web). That advice is to only invest what you are comfortable loosing.  With my small investment last spring, it's grown into the tens of thousands for me and I can see price swing DAILY that affect me tens of thousands of dollars lately. The roller coaster is amazingly fun.  I don't sweat the shocks and downward movement because time and time again it's been written off... Yet the code and network is relentless. It won't stop. People will keep returning to it because it refuses to go out of business. There is no business.  It becomes "Truth" itself. Non bending truth.  When people realize that and get to that level of understanding the idea won't die.

I can't think of anything that could seriously stop it.  The internet itself was designed to survive a nuclear war.  Taking down the internet won't even stop it.  It will just pause it until it is turned back on and functioning. The blockchain will run on all pcs that were running the code beforehand. Once they are connected the system will simply reassemble itself where it left off and there it goes again.  Governments can try to hack it and with enough machines and unlimited money - they could stop it temporarily. But, when they are done - which they will eventually be - it would just reassemble and continue where it left off. The price might be back to zero again....but then people would just likely repurchase it. As has been proven with smaller "alt coins".

Don't you find that intriguing? I'm more interested in the science of it than the money of it. Fun times!

 

 

 

 

mrees999's picture
mrees999
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Posts: 435
Insight appreciated

I've enjoyed your interpretations of the market action on this. Just curious if you dipped your toes during that last price drop spike? They happen so violently but last so short you have to be on your toes to take advantage of them. Are you still watching from the sidelines?

 

 

 

davefairtex's picture
davefairtex
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Posts: 5932
BTC market action

mrees-

No I've remained on the sidelines with BTC - partly because I don't have all my trading tools available to me, and partly because I've been a bit distracted this holiday.  I can shoot off a quick sense of what the chart is saying, but if I'm going to trade something I need to get a better feel for it before just jumping in.

I think I need to read the protocol spec so I can get a sense as to what trading information is available.  Maybe some of it would make a good chart.

I realized recently that over time, bitcoins will disappear from the system.  That guy losing the disk drive with 7500 of them was just one example; how many people will die with bitcoins in some random wallet sitting somewhere unknown?  I just wonder what the loss rate is/will be.  [Its a feature...right up until you lose your bitcoins!  Just like cash though]

 

bowskill's picture
bowskill
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Posts: 78
Lost bitcoins

Good point Dave. I have thought about that too. The only answer seems to be "infinite divisibility" of the remaining bitcoins. Loss of bitcoins is deflationary for remaining stock.

mrees999's picture
mrees999
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Posts: 435
That is the big mystery to me

That is the big mystery to me too. I know from talking to the people that were mining back in the day that a ton of them were deleted by sloppy file cleaning, had drive reformats. It was just an experiment. When they were pennies each - it was more hassle than worth to move them or back them up. Now they are angry and shocked at their own carelessness. There are some that held the faith after the first few crashes - but it took the wind out of many sails those days. Another 600k were traced back to the silk road founder. It's probably that they were encrypted so the FBI may not be able to get them...but it could be part of a plea bargain, or possible he wrote the password somewhere they could find it.

 

It would make for an interesting poll to find out from that group - how many "lost" their coins. My own estimate is that perhaps half of the coins mined in the first two years are actually dead  and will never come to market or be spent.   This is considered their "sacrifice" to make the rest of the currency more rare thus more valuable. It is said that Sotoshi himself mined a million of the coins, but none of them have been spent.  As he was nurturing his "baby" and inferring what I can about the intent of the project, I doubt he kept them either as it was as much a thesis as a reality.

Because this is likely difficult to prove, the market will probably assume they are available for trade rather than deduct them from calculations. Still the actual supply and demand will win the day but how many factor this into the forecasting? It might give those a slight edge that do.

 

There are some benefits of some of the newer digital currencies in that regard as Litecoins had the benefit of starting two years later and many lessons learned by the miners. The population in litecoin is probably a more accurate representation of the true number available. 

 

Good luck to you and sorry for any offense I might have caused. I was trying to "kid" with you in playfulness you might see with friends "razzing" each other. But it can be misinterpreted when in writing. If you knew my personality, you wouldn't feel offended.

 

-Mark.

davidmills's picture
davidmills
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Gold vs Bitcoin? Take a bet

Stumbled across this. Was tempted to put a wager on it but then I am sure gold will win: http://bit.ly/1e2c6Ag

SPAM_seanwilliam1988's picture
SPAM_seanwilliam1988
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Here’s also an article that

Here’s also an article that proves why bitcoin is more beneficial from gold: http://bitcoindaily.com/bitcoin-gold-2-0/

reymarkperry's picture
reymarkperry
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When it comes to

When it comes to transportability, bitcoin will always beat Gold. You can’t carry an ounce of Gold in your pocket just to purchase stuff at the local store. It doesn’t happen that way. You have to go through a lot of paperwork before you can transfer it with the other party, particularly when transacting overseas.

tictac1's picture
tictac1
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Posts: 175
theory vs. reality

Check your local craigslist. In CA, there are plenty of ads for bitcoin for sale. None for buying bitcoin. There are also plenty of ads for people buying gold bullion, jewelry, etc, but few to none for people selling said gold. If I had bitcoin and needed fiat, I'd have to compete. If I had gold and needed fiat, I'd have multiple parties competing for my gold.

Why anyone would believe that a digital currency is secure in the age of stuxnet and the NSA is beyond me. Talk about a confirmation bias!

If bitcoin still has "value" in 1000 years, it will be about 20% as proven to hold value as gold and silver.

Carrie D. Waterbury's picture
Carrie D. Waterbury
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Posts: 1
Bitcoins have victory

That's good but if you have bitcoins then you will earn more profit because the rate of bitcoin is increase much larger rate than gold so it gives you more profit.

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