Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[macsga]

Well, to me this chart does not show any growth at all in 2014.  There were some small peaks in June and in the last few weeks, but they did not reach the levels of Jan--Feb 2014, and the volume quickly returned to the baseline that has been in rule since March. 

But, anyway, even this chart does not show use in commerce; it is merely the total BTC output of all transactions (minus estimated changebacks) times the BTC price.  So it includes an unknown but large percentage of non-payment transactions.  Perhaps the USD volume of payment transactions are increasing, or perhaps it is decreasing; we cannot tell from that chart.

I insist, neither blockchain statistics nor trade volumes give us any useful insight on actual adoption as means of payment.  The traffic in the BitPay and Coinbase "wallets", as gathered by that Czech site, would be a more direct evidence (assuming the wallets were correctly identified, which I cannot tell for sure).  As I wrote, I have had a look at the Bitpay wallet, and did not see growth in 2014 either.  But please check yourself.

Jorge, apart from the fact that Oda.krell has presented solid evidence about his claims, you present your claims without solid evidence. A point that most people forget about bitcoin is the international transaction use. There's a great volume of money being transferred from immigrants to their relatives consistently and solely on bitcoin. Why? because it's easy - safe - fast and doesn't cost a penny. Many people out there saw a relief from the ''usual'' money transfer tactics when bitcoin surfaced, plus the significant fact that when they were illegal immigrants, they usually had to pay more for their anonymity.

Commerce comes second on the list. Being adopted by Microsoft, later Paypal (Apple today announced its integration with Paypal BTW), and whatever company sees it as an opportunity to integrate it, has no significance towards BTC price at the moment, because bitcoin is simply VERY SMALL when you compare it to other ways of payment. A direct comparison with Paypal's annual transaction volume will give you the idea what I'm talking about. I'd put my bets that this will significantly change in the near or mid-term future.

[JimboToronto]

...fiat socialists ponzi scheme tax-prison farm...

LOL

Can I quote you?

 

[JayJuanGee]

"Growing adoption" would be more people buying bitcoin for the purpose of paying for goods and services.  As has been pointed out many times, there is no reliable data on that parameter.

growing adoptions first and foremost means more people having bitcoins

I don't think that is what most people here understand by "growing adoption".  They usually mean what I wrote above, or "more bitcoins being used to pay for goods and services".

The total amount of BTC that people have is known with good accuracy (~13 M BTC now), and it does not make much difference for the price whether it is owned by a few people or by many.

Jorge:  You should know better that the second part of your formula is a separate issue.    Yet, maybe we are getting caught in semantics because adoption could merely mean more people who have bitcoins or are somehow involved with bitcoins.  Even though there certainly are more liquidation opportunities for BTC now, as compared with a year ago, some of the tax ramifications  have NOT created incentives for people to spend their BTC.

In other words, increased adoption does NOT necessarily mean the same thing as increased transactions.. those are separate but possibly related indicators.

[solex]

A point that most people forget about bitcoin is the international transaction use. There's a great volume of money being transferred from immigrants to their relatives consistently and solely on bitcoin. Why? because it's easy - safe - fast and doesn't cost a penny. Many people out there saw a relief from the ''usual'' money transfer tactics when bitcoin surfaced, plus the significant fact that when they were illegal immigrants, they usually had to pay more for their anonymity.

Yes. This goes to the root of the error in Jorge's analysis. He makes the a priori assumption that Bitcoin has no inherent value:

Bitcoin will still be a risky investment, with no backing assets and paying no dividends, whose value is entirely dependent on the expectation of future expectations of investors.

The fact is that Bitcoin has enormous inherent value because of the utility of its payment network, sending money point-to-point anywhere in the world, between any persons, without censorship, without 3rd-party permission, irreversibly, for low fees, very fast, fairly anonymously. The larger the network becomes, like a phone system, the more useful it becomes. There is a positive feedback cycle and the value benefit to its native currency unit has been shown by the market over the past 5 years.
Jorge, the academic, cannot deny this evidence and maintain his professional integrity.

[lyth0s]

bitcoin adoptoin is growing fast

We do not know that, really.

"Growing adoption" would be more people buying bitcoin for the purpose of paying for goods and services.  As has been pointed out many times, there is no reliable data on that parameter.

--snip--

Does the word adoption only apply to consumers? Would you disagree that "merchant adoption" is growing?

Honestly the way I see it is that merchants will accept it before consumers buy it. Why would a consumer buy bitcoins if its only purpose was to buy alpaca socks? --They wouldn't. As more merchants accept it there is more reasons for consumers to buy and use it.

Take microsoft's merchant adoption for example, now that bitcoins can be used on xbox and to purchase microsoft products, there is now more of a reason for xbox gamers to acquire bitcoin (through purchases, trades, tips etc) hence consumer adoption will follow merchant adoption.

Also when I tell people that I can get up to 20% discounts on amazon (using purse.io) people are ecstatic about bitcoin. Also 3% off at a lot of stores like target (using gyft.com) is just the start. Discounts will get better which adds further incentive for  consumer adoption.

[ChartBuddy]

Explanation

[mymenace]

Explanation

buy wall remains still, must be waiting for silly bears

[creekbore]

Wow, same old people looking at the same old (highly subjective) charts: the cultists interpret them as proof of "adoption", Jorge says the metric is flawed, cultists get all angry, noobs call Jorge names, price continues to go down.

The story of Bitcoin 2014.

[FatherBob]

...
Also when I tell people that I can get up to 20% discounts on amazon (using purse.io) people are ecstatic about bitcoin. ...

Lol, "get up to 20%."  I actually checked it out, feel Rickrolled now
Technically, you can get up to 100% off.  Your discount depends on how much of a premium people are willing to pay for your BTC over market.

How it works

Firstly, when someone – Alice, say – wants to use bitcoin to purchase items for a discount from Amazon, she deposits bitcoin in her Purse.io account. Then, using a 'share' URL, she imports her Amazon 'wish list' into Purse.io and indicates what level of discount she would like for the items.

--Coindesk

Much hilarity ensues.

[DonQuijote]

Poll:

>385   - 74 (33.6%)
380   - 6 (2.7%)
375   - 13 (5.9%)
370   - 11 (5%)
365   - 4 (1.8%)
360   - 13 (5.9%)
<355   - 99 (45%)

We have winners haha

[Dilla]

Looking at the charts after the run up to 450, we have hit the low of around 340 twice. Is that a sign of another run up? Or are we going down to 270 again?

[dakota neat]

Looking at the charts after the run up to 450, we have hit the low of around 340 twice. Is that a sign of another run up? Or are we going down to 270 again?

We are going to leave this embarrassing bear market and move on to the brave new world of bitcoin.

[Coinshot]

The price is rallying instead of going down in anticipation of weekend dump. Its quite bullish

[oda.krell]

Just a quick reply ...

I insist, neither blockchain statistics nor trade volumes give us any useful insight on actual adoption as means of payment.  The traffic in the BitPay and Coinbase "wallets", as gathered by that Czech site, would be a more direct evidence (assuming the wallets were correctly identified, which I cannot tell for sure).  As I wrote, I have had a look at the Bitpay wallet, and did not see growth in 2014 either.  But please check yourself.

Don't know the the Bitpay wallet statistics, but would be interested. Any link for it?

Anyway, in my opinion there are two general problems with your counter-arguments to the adoption evidence.

(1) Presented with several metrics that intuitively seem to be half-decent proxies for "adoption", you find fault with any of them on the basis of what I'd call minor problems. But maybe I get what bothers you...

If it makes you more inclined to see it my way, I will admit this much: I agree. We cannot be absolutely sure adoption is growing based on those statistics. They could be (partially) fake. They could over-represent non economically significant transactions.  And so on.

However, they are the best approximation we have, and by and large, they point to increasing adoption. So while I agree that there remains some epistemic uncertainty perhaps, there is little aleatoric uncertainty that adoption grows given this data.

(2) You don't really follow the Copernican principle applied to time when you only concentrate on a very narrow range in the very recent past where adoption did not soar like it did before, and conclude from it that there seems to be no further adoption - ignoring that overall the adoption metrics are significantly up compared to where they were a year ago, and vastly up from 2 years ago.


Okay. Here's another one, this time, pure merchant driven transactions:

In May 2013 Bitpay had a volume of 5 million USD per month processing transactions on behalf of their merchants. (source)

A year later, May 2014, it's 1 million USD per day. (source)

Time for the same spiel again? "Maybe it's up from May to May, but how can we be sure that from May to now adoption continued?!" Yes, we can't be sure. But given the (often incomplete, chunky) data, I consider the hypothesis "growing adoption, though maybe not growing as fast as in the very early phase" more likely than "sudden and complete saturation/end of growing adoption".

[aminorex]

I've been surprised at the degree of correlation between XBTUSD and CL1.  Still and all,
Monkey is telling me to try buying oil again between Monday and Wednesday, but doesn't expect XBT up until late next week.

Mostly, Monkey just expects me to shut up and stay short SPUs until roughly Wednesday.

USDJPY unlikely to see any upside until mid-to-late next week.
EURNOK going *up* through Tuesday or Wednesday.

Monkey expects a lot of turning points next week.  First to turn might be US long bonds.  Monkey actually made me sell, because risk was picking up too much.

[grappa_barricata]

@oda.kell: think of it in another way:

If we assume that adoption drive prices, then a metric of adoption would be the price itself. This will tell you that adoption has not grown in the past year.
If instead, we assume that adoption doesn't drive prices then the discussion is irrelevant for future prices.

Note that I intuitively believe that adoption has grown, but also that it is not linked to price at all.

[ChartBuddy]

Explanation

[oda.krell]

@oda.kell: think of it in another way:

If we assume that adoption drive prices, then a metric of adoption would be the price itself. This will tell you that adoption has not grown in the past year.
If instead, we assume that adoption doesn't drive prices then the discussion is irrelevant for future prices.

Note that I intuitively believe that adoption has grown, but also that it is not linked to price at all.

There's one simple counter to that, and I'm not the first one to make that observation:

Sometimes price runs ahead of adoption (and will eventually get back to reality). Sometimes adoption runs ahead of price (and it'll take a while before price reacts to that).

Last time that happened was late 2012/early 2013, when about 1.5 years of very impressive network growth explosively made themselves known to the market.

EDIT: But if your point is that from growing adoption we can't conclude that we're going to see rising price now-ish, then I agree of course.

[aminorex]

I insist, neither blockchain statistics nor trade volumes give us any useful insight on actual adoption as means of payment.

The gap between the concept of precise and certain knowledge, and what is properly described by "any useful insight"  is vast and deep.  You give the impression that imperfect knowledge is useless, and that perfect is possible to achieve -- if only in principle -- neither of which is a usefully true precept.

Cast for red herring in Lethe from astride your stalking horse.  I shall not assault your fortress of cognitive nihilism.  Its defending straw army is too intimidating. 

[agath]

and when you realise how absolutely corrupt and broken the fiat socialists ponzi scheme tax-prison farm really is then you go wtf and go all-in 100% adopt bitcoin.

This.