Quote from: falllling on August 31, 2014, 11:24:03 AM

Quote from: CryptoCarmen on August 31, 2014, 11:21:41 AM

Quote from: bitcon on August 30, 2014, 11:16:53 AM

stability is what btc needs to gain credibility as a legit currency

Yes stability with tiny bit of inflation. Then BTC will be a keeper!

Bitcoin will continue the downtrend, according to a research note by finance giant Citi. The two main factors that the Bank blames for the price going down are miners and merchants. Citi estimates that mining adds around 3,500 new bitcoins ($1.75 million) every day. Because of the ever increasing difficulty of mining, the majority of these coins are quickly liquidated on the market to cover electricity, cooling and other costs.

If the miners are a steady source of supply and there is no increase in final demand, we have this overhang of bitcoin being sold in the market. In consequence, we have downward price pressures.

Citi also thinks that the large merchants that have recently adopted bitcoin (DELL, DISH) will be a net negative for the cryptocurrency. Due to regulatory and accounting rules, these corporations cant hold the bitcoins they receive, even if they wanted to do so. They have to sell them as soon as possible to avoid taking on speculative risk, thus contributing to lower prices.

Citi has much to lose as Bitcoin continues to gain. On top of that, Citi appears to be assuming a couple of interesting things with regards to mining. 1) They are assuming that all of the mining rewards must be used to cover electricity and other expenses related to mining. This is of course absurd, and if it were actually true there would be no miners and no bitcoin ecosystem at all for you to troll amongst. 2) They are assuming that these miners will be selling all of the coins not spent on electricity and other expenses. That's a big assumption considering that it's more likely that most miners get into mining in the first place because they believe bitcoin is a long term investment. That likely being the case, Miners are probably only selling a portion of their rewards.

Also Merchants accepting Bitcoin and then selling these same coins on the market is necessarily a zero sum game. There is no added selling pressure. They Sell the same amount (or less) of the coins they accept per transaction.

You should change your name to "Failing"