Bitcoin isn't anything really new either though - it's a new application of existing concepts. And I guess I don't see competition as particularly threatening to Bitcoin. If Bitcoin takes even 10% of the global currency market current investors will make an outrageous killing. It can coexist with other currencies, if the concept is sound. A monopoly isn't the only way to win, and anything that is good for cryptocurrencies in general is good for Bitcoin.

A new, "better" currency isn't going to displace Bitcoin overnight. It too will have to bootstrap an economy before it's viable. That's the hard part, and Bitcoin is already progressing towards it. And in the event a competitor comes along, you can always trade your Bitcoins for it.

Don't forget that Bitcoin has no central point of failure. It can't "fail" in the same way a company can just because a competitor comes along. It can only fade out over time, giving you plenty of time to react.

Now again, all of this assumes that Bitcoin is technically sound. It can certainly fail in other ways.

 

Here's hopin'.

You're right, I guess I wasn't clear. When I said "if the concept is sound", I did not mean to imply either that it is, or that such a thing could necessarily be known ahead of time. There are always unknowns, and Bitcoin certainly has its share of known risks. You know if the concept is sound by whether it works in the long run. For now, my educated guess is that Bitcoin is sound, and the rest of my advice is based on that.

If you're a seasoned trader, you love wild swings (although they're a lot harder to deal with without derivatives). If you're an average trader, or one of these people panicking now who know *zero* about trading, this is not the environment for you. Low volume is not just a problem because it limits your moves, it's a problem because higher liquidity means saner markets.

As to the rest of your comment, I agree - absolutely we need more traders. I'm just not willing to accept the level of risk that comes with *being* one of those traders right now, and I think most people here shouldn't either.

Heheh. I haven't risked much. I could lose it all and be out a nice lens or two for my DSLR.

Which, I suppose, brings us to another fundamental point about markets: risk and reward are inextricably linked. You could make a killing here, but you could also lose it all. So make your killing with a reasonable amount of initial capital and be happy with what you get.


You misunderstood my point, and I agree with you 100%. See the first half of this comment - this is clearly a high risk investment.


I have enough experience in financial markets to know that technical analysis is well grounded in human group psychology. The pattern of a chart with strong technicals is nothing more than the pattern of a crowd with growing interest in something. What this chart shows is that investment interest in Bitcoin is steadily growing and shows no sign of slowing down on the larger scale.

When you remove all the bullshit, that's what you're looking for in any investment, and reading the charts is one way to find it.

I don't care what it's because of - it's what the market is predicting, according to my reading of the chart. It knows more than I do.

But if I had to guess, I'd say it's simply that Bitcoin's economy will continue to grow and attract more capital.

Yeah, and the base trendline (which is down around $2 or so now) will be at $150 in somewhere around 2 years at the current growth rate (quick estimate, but it's in the ballpark). We ain't seen nothin' yet.

Absolutely. That is exactly what I have been doing, and will continue to do.

Jesus, people. You should stay out of financial markets if you're not going to take the time to familiarize yourself with their mechanics.

This is what markets do. Markets do not go up (or down) in a straight line. This is a correction, and a necessary one. But it could go a lot lower, and you still shouldn't panic. Look at the "all data" chart on bitcoincharts.com in log scale (ALWAYS use log scale). This latest drop is barely a blip on the long-term trend, which is still VERY strongly positive.

I've been buying Bitcoins all the way up past $30 with the expectation that a correction as low as $8 was likely. Who cares? It could hit $2 without breaking its long-term uptrend, or it could go from here to $100. If you believe in the fundamentals, and you're not trying to do short-term trading, keep buying. Hell, even a test of the $1 level might be a healthy thing for the market. Corrections flush out the weak buyers, make some money for the shorts, and set the stage for the rally to go on.

But while we're on the subject, Bitcoin is a terrible market for short-term trading. Low-volume markets are nasty, and you're likely to lose your shirt. Slow down, remember that you're in the market before even the institutional investors, and rest assured that if the concept is sound you're going make a killing in the long run (which probably won't even be that long).

Buy and hold, averaging in through the peaks and valleys. That is how you make your money when you're in this early, not quick trades. Bitcoin is a long-term growth play, and a hell of a promising one at that. Any talk of a bubble is nonsense when 99% of the population either hasn't heard of it or thinks it's a joke.

There's an easy answer to the problem of price stability from a business perspective - futures contracts. Hedge away your risk like businesses do when dealing with any other volatile price. The lack of a good futures exchange is a major sticking point in the viability of Bitcoin for business.

Technical analysis in general works in log scale. Percentage change is what matter, not absolute value.