A few thoughts - Tuesday, May 6, 2014
Posted: Tue May 06, 2014 12:00 pm
Today, I have lots to say:
1.
Some people seem to be concerned that the US government will follow the Chinese government, and "they" will make bitcoins illegal. However, these people fail to understand that in China, it is easy to execute grand plans, like the one they are doing now to push down the price of bitcoins. Their entire party meets regularly and adopts huge "five year plans" that list large numbers of goals they want to accomplish in the future.
The argument by some people in /r/bitcoin is that the US won't act until bitcoins are used by enough American citizens that they pose a threat to dollars. But unlike in China, that's exactly the wrong time to act.
In the US, there is no "they" to participate in some grand conspiracy to suppress citizens. That's the whole point. Who, exactly, is going to declare bitcoins illegal? The President is not authorized to just stand up and do that. Congress can pass a law, but in this scenario, many people are using bitcoins already. Those people aren't going to just stand by and reelect Senators who vote against them. Even above money and prestige, Congressmen desire nothing more highly than to be reelected.
In China, pressure against bitcoins increases as more people use them. In the US, pressure decreases, because once too many people start to care, representatives can't do anything about it, or they would rather spend political capital on an issue they care more about.
2.
I was shocked yesterday by an article that proposes that 30,000 programmers (http://www.businessinsider.com/novograt ... nks-2014-5) are working on bitcoins in some capacity right now. If that is the case, then bitcoins are massively, massively undervalued.
But first, we need to consider what a "programmer" is. For the purpose of this study, is it a person who has a master's degree and who works 40 hours a week for full time pay? Is it someone like me, who works 70 hours, but the 30 hours I work on bitcoins are a net loss (so far)? Or, is it one of the many people who claim to be excited in bitcoins but make contributions to vaporware products like the buttercoin exchange that never see the light of day?
Perhaps someone can verify if this 30,000 number is true (because I don't know what study it comes from). If so, then if we set the average programmer's salary at $80k, the salaries of the programmers working on bitcoin alone are a significant proportion (at $2.4b) to the entire market capitalization of bitcoins.
3.
I set aside my entire salary last month and put it in a checking account that is linked with Coinbase. Along with money that was already there, I have a huge stake ready to press the "buy" button as soon as there is some upward movement. Normally, I would have put this month into stocks, but instead it is sitting in the account waiting for a trigger. The longer that passes, the more money I set aside. I have never had more funds positioned to buy than this moment.
I would imagine that there is a lot of money like this, just sitting in checking accounts waiting to explode. Combined with the Bloomberg news and financial institutions getting involved, I think there is some reason to suspect that the 234-day cycle will be the same length as normal, but that the "struggling" phase will be brief and things are going to berserk faster than normal.
As soon as there is any movement, look for all this money, including mine, that is already earmarked for bitcoins to start pouring in. A few weeks ago, /u/lowstrife predicted a massive short squeeze, which will contribute to the initial rise.
4.
China is falling apart, and yet the price has barely fallen between today and yesterday. A major bank closed BTC China's accounts, and nobody cares anymore. People are withdrawing from that May 10 conference, and nobody cares anymore. And there is a joint statement by exchanges trying to salvage the Chinese bitcoin economy, and a few hours later, nobody cares anymore.
As stated earlier, this is a battle between the Chinese government and Wall St. The battle is starting to swing in the opposite direction.
5.
The Bejing bitcoin conference is doomed. As predicted, many of the speakers are dropping out under pressure from the government. Within a few days, expect to hear that the venue was accidentally booked by another tenant, or that there are "repairs" that need to be made to the venue from some mysterious damage that occurred.
Even if that doesn't happen, how is a conference going to be organized when nobody is willing to speak? And who is going to want to speak after the biggest names in bitcoins are now too afraid to do so?
6.
Everything is converging on this weekend. /u/moral_agent's bubble chart, /u/emocmo's point and figure charts, the cryptocoinsnews.com articles, and various technical indicators all converge. Expect a trend reversal.
7.
Further supporting the evidence that the trend is about to reverse is the news plastering the front page of /r/bitcoin. It hasn't been this overwhelmingly positive in months. There's one post about the Chinese joint statement, and everything else is about products and services and new innovations.
Don't get confused about this. Remember, news does not drive the bubble cycle. Rather, you can get an impression of where in the cycle we are by how the news is taken. Right now, news that is far worse than what happened weeks ago is getting buried under stories about developers and businesses accepting bitcoins.
Other
1.
Some people seem to be concerned that the US government will follow the Chinese government, and "they" will make bitcoins illegal. However, these people fail to understand that in China, it is easy to execute grand plans, like the one they are doing now to push down the price of bitcoins. Their entire party meets regularly and adopts huge "five year plans" that list large numbers of goals they want to accomplish in the future.
The argument by some people in /r/bitcoin is that the US won't act until bitcoins are used by enough American citizens that they pose a threat to dollars. But unlike in China, that's exactly the wrong time to act.
In the US, there is no "they" to participate in some grand conspiracy to suppress citizens. That's the whole point. Who, exactly, is going to declare bitcoins illegal? The President is not authorized to just stand up and do that. Congress can pass a law, but in this scenario, many people are using bitcoins already. Those people aren't going to just stand by and reelect Senators who vote against them. Even above money and prestige, Congressmen desire nothing more highly than to be reelected.
In China, pressure against bitcoins increases as more people use them. In the US, pressure decreases, because once too many people start to care, representatives can't do anything about it, or they would rather spend political capital on an issue they care more about.
2.
I was shocked yesterday by an article that proposes that 30,000 programmers (http://www.businessinsider.com/novograt ... nks-2014-5) are working on bitcoins in some capacity right now. If that is the case, then bitcoins are massively, massively undervalued.
But first, we need to consider what a "programmer" is. For the purpose of this study, is it a person who has a master's degree and who works 40 hours a week for full time pay? Is it someone like me, who works 70 hours, but the 30 hours I work on bitcoins are a net loss (so far)? Or, is it one of the many people who claim to be excited in bitcoins but make contributions to vaporware products like the buttercoin exchange that never see the light of day?
Perhaps someone can verify if this 30,000 number is true (because I don't know what study it comes from). If so, then if we set the average programmer's salary at $80k, the salaries of the programmers working on bitcoin alone are a significant proportion (at $2.4b) to the entire market capitalization of bitcoins.
3.
I set aside my entire salary last month and put it in a checking account that is linked with Coinbase. Along with money that was already there, I have a huge stake ready to press the "buy" button as soon as there is some upward movement. Normally, I would have put this month into stocks, but instead it is sitting in the account waiting for a trigger. The longer that passes, the more money I set aside. I have never had more funds positioned to buy than this moment.
I would imagine that there is a lot of money like this, just sitting in checking accounts waiting to explode. Combined with the Bloomberg news and financial institutions getting involved, I think there is some reason to suspect that the 234-day cycle will be the same length as normal, but that the "struggling" phase will be brief and things are going to berserk faster than normal.
As soon as there is any movement, look for all this money, including mine, that is already earmarked for bitcoins to start pouring in. A few weeks ago, /u/lowstrife predicted a massive short squeeze, which will contribute to the initial rise.
4.
China is falling apart, and yet the price has barely fallen between today and yesterday. A major bank closed BTC China's accounts, and nobody cares anymore. People are withdrawing from that May 10 conference, and nobody cares anymore. And there is a joint statement by exchanges trying to salvage the Chinese bitcoin economy, and a few hours later, nobody cares anymore.
As stated earlier, this is a battle between the Chinese government and Wall St. The battle is starting to swing in the opposite direction.
5.
The Bejing bitcoin conference is doomed. As predicted, many of the speakers are dropping out under pressure from the government. Within a few days, expect to hear that the venue was accidentally booked by another tenant, or that there are "repairs" that need to be made to the venue from some mysterious damage that occurred.
Even if that doesn't happen, how is a conference going to be organized when nobody is willing to speak? And who is going to want to speak after the biggest names in bitcoins are now too afraid to do so?
6.
Everything is converging on this weekend. /u/moral_agent's bubble chart, /u/emocmo's point and figure charts, the cryptocoinsnews.com articles, and various technical indicators all converge. Expect a trend reversal.
7.
Further supporting the evidence that the trend is about to reverse is the news plastering the front page of /r/bitcoin. It hasn't been this overwhelmingly positive in months. There's one post about the Chinese joint statement, and everything else is about products and services and new innovations.
Don't get confused about this. Remember, news does not drive the bubble cycle. Rather, you can get an impression of where in the cycle we are by how the news is taken. Right now, news that is far worse than what happened weeks ago is getting buried under stories about developers and businesses accepting bitcoins.
Other
- Today's irrelevant comment: It amazes me that Game of Thrones, on a paid channel, continues to utterly destroy every other show on television. Who would have thought that the fantasy genre could be so popular? The technology finally exists to depict The Wheel of Time as it was written; I wonder how long it will be before someone decides to try to copy HBO, especially given that A Song of Ice and Fire has succeeded with a much more complex and dark story.
- Days until July 24: 79