Bitcoin Surges To New USD Record High (+100% In 7 Days)

Tyler Durden's picture

A week after spiking above $900, before dropping 50% in the following 48 hours amid last week's Senate hearings, Bitcoin has recovered the losses (i.e. doubled) and is now trading at record high levels against the USD - $930 on Mt.Gox. Notably, in China, Bitcoin remains well off its record highs (5200 vs 6989 highs).

 

(Chart:bitcoinwisdom.com)

 

As Mike Krieger asks, is Bitcoin the Black Swan no one saw coming?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
SilverIsKing's picture

Can one purchase Litecoin with USD on BTC-e?

StacksOnStacks's picture

Yes, you can.  I buy Bitcoin (BTC) using Coinbase and then transfer the BTC to BTC-e (Bitcoin Exchange) and buy Litecoin (LTC) and then transfer them to their respective "wallets".

SilverIsKing's picture

But not directly.  Sounds a bit over my pay grade but I'll explore.

Thanks.

Ignatius's picture

Recommended viewing:

http://www.maxkeiser.com/2013/11/looking-at-bitcoin-through-an-s-curve/

Truth is, and because of inumerable variables, we just don't know where btc is going.  But the trend is adoption and that trend is way up.

BellyBrain's picture

Anyone turning those BTC into local fiat?  How liquid are the exchanges?  How about buying things at bitcoinstore? 

 

I'm curious more than anything -- never got in on it myself.  Too bad for me...

PathForward's picture

* The recent price run-up in BTC is likely manipulation from TPTB, not from speculative BTC advocates.
* This is a long comment, but please bear with me, since I believe I can show how BTC fits into the bigger picture. I welcome your better ideas.
* Here’s the path as I see it:
* The US government purposely wreaks havoc with new crypto-currencies (e.g., Bitcoin) as they’re launched and come into play. The way the USG wreaks havoc, is simply by undermining confidence in CC’s by causing dramatic occasional price drops. Here’s one way the USG could accomplish that goal: Consistently buy BTC on the open market over a period of time, thereby creating a parabolic upward ramp in BTC’s USD price. By making those purchases, the USG would build a large position in owning BTC. Then upon occasion and without providing any notice, the USG would sell off most of its BTC holdings in a relatively short period of time, thereby causing a dramatic and confidence-shattering price fall. How will vendors or consumers ever begin to feel comfortable holding value in BTC, if periodically there are large and sudden price drops? As long as people have confidence in conventional fiat currencies, and as long as BTC is traded for conventional fiat currencies on open markets, and as long as governments fear losing monetary control to CC’s, there will be disorderly action in CC pricing, and confidence in CC’s will not be allowed to grow strong.
* Multiple governments around the world (e.g., China) continue to acquire physical gold as rapidly as possible while being careful not to directly cause the spot market to break.
* The COMEX eventually has a delivery default for futures contracts of physical gold, wherein too many longs stand for delivery, which thereby ends the paper game.
* The price for physical gold skyrockets.
* Prices for a wide variety of commodities rise (e.g., oil) and hyperinflation ensues.
* As hyperinflation progresses, US citizens encounter severe difficulties and they learn to consume far less energy, thereby reducing oil imports to a level where the USA can potentially survive using only domestic oil reserves (i.e., no more imported energy is required).
* After a period of continued hyperinflation, the USD becomes almost worthless and the USG announces/releases a New Dollar (ND).
* The ND exists as a certificate (i.e., paper note) that’s 100% redeemable for an *extremely* small amount of physical gold, which thereby instantly revalues gold substantially even higher around the world. Hardly anyone can believe how valuable gold becomes.
* The USG offers to exchange old USD’s for ND’s for a relatively short period of time and at a fixed exchange rate (e.g., 1 trillion to one), after which old USD’s are no longer considered legal currency. US citizens are extremely disappointed at how few ND they are offered for their old USD, and many people vow never to trust the USG again with their savings. Gold is once again considered a special commodity, and it’s deemed suitable as a long-term savings vehicle.
* During the hyperinflationary period, most people are able to pay off their home mortgages, since their loans are denominated in old USD’s. That’s one of the few benefits the people receive through hyperinflation.
* During the brief currency exchange period, the USG effectively ends up paying out approximately 5% of its total physical gold reserves in exchange for old USD’s, thereby leaving the USG with 95% of its physical gold reserves available.
* The USG stays in power and has large gold reserves to spend as it’s effectively forced by lower-level systems (i.e., the people) to morph into a more balanced entity. Because the US gold reserves are limited, the USG realizes that it must rein in spending and achieve a better balance of control with the people. (i.e., the USG effectively promises its people that it won’t create more new money than it has gold to back ND with.)
* Crypto-currencies (e.g., Bitcoin) become more stable in value since the USG is no longer able to create fiat money at will to wreak havoc with them. CC’s grow in popularity and effectively become backed by gold, since crypto-currencies (CC’s) trade freely for all different kinds of value, including physical gold.
* Due to continued distrust of the USG by US citizens, large quantities of ND’s are either redeemed for physical gold directly from the USG, or ND’s are traded in exchange for CC’s. Eventually, CC’s largely replace the USD as currency, thereby making it almost impossible for the USG to exert excessive control through monetary means, and forces the USG to operate within a balanced budget since the USG cannot create CC’s nor gold out of thin air. In addition, very few citizens are willing to lend value to the USG (i.e., treasure debt), which thereby helps to keep USG expenses in line with actual tax revenues.
* A 15% flat tax is implemented on personal income, the home mortgage deduction is eliminated along with almost all other tax breaks, and the vast majority of entitlement programs are completely eliminated.
* That’s the bigger picture, and that’s how CC’s are going to fit into it.
* Expect severe and repeated pummelings of the BTC price until the COMEX defaults and fiats begin to plunge. The USG has the means to remain in control for now, and it will likely perform the actions required to achieve that goal.

CH1's picture

It goes up, it goes down, it goes up again...

... but it remains Free Men's Money!

Fuck the cartel!

Stackers's picture

mining away at 200 giga hashes right now ;)

seek's picture

600 here. I think Alloutofbubblegum said he's over 1TH. It'd be interesting to see what ZH subscribers total hashrate is.

wintermute's picture

Maybe there should be a "ZHmining" pool.

seek's picture

That'd be pretty easy to do if we're all on the same pool. I use btcguild.

mccoyspace's picture

I would love to see a ZH mining pool. For both BTC and LTC

dark pools of soros's picture

mining a BTC a day keeps the jobs away

lickspitler's picture

Bitcoin gets slapped because MtGox restriction on cash withdrawls.

eg

If you had 25k Bitcoins from the old days you sold them through Mtgox when it was the only exchange.

Withdrawl restrictions @ MtGox mean. You have to buy them back to use another exchange, thats why the exchange arb exists.

This causes up and down vacums.  Gold in a down trend  Bitcoin in an illiquid uptrend. No manipulation Just a market.

So many playing the maniluplation card coz so many think Gold should be higher and Bitcoin should be zero.

Deal with it.

 

 

Duke of Earl's picture

The BTC market is peanuts compared to real fiats and PM's.  It makes no sense at all for the USG to tamper with a currency that may implode on its own.

Currently, $1-3MM can cause wild swings all day long in BTC.  Probably can be done with far less.  Not to mention that there is also no way to predict how that sort of intervention would impact BTC.

wintermute's picture

Bitcoin is at 50% the value of the entire world silver stockpile (billion ounces) and has already passed palladium.

Duke of Earl's picture

Not sure how you are calculating this. The silver institute has 700 million ounces mined last year alone.

https://www.silverinstitute.org/site/wp-content/uploads/2012/07/wss12sum...

Bitcoin is only $12 billion max. Gold is a $9 trillion market.

wintermute's picture

Most of the mined silver is consumed by industrial processes. 

http://www.wealthdaily.com/articles/silver-is-now-rarer-than-gold/3150

In fact, articles like above indicate that stockpiles are meagre.

http://www.zerohedge.com/news/2012-12-24/eric-sprott-why-are-investors-buying-50-times-more-physical-silver-gold

This ZH item reports total silver of all forms could be 5 billion ounces which equals about 8x the value of Bitcoin, but it is a real stretch to include granny's silver spoons as currency.

 

RaceToTheBottom's picture

Re US Government actions in Bit-coinland.....

You will know them by their MonkeyHammer

Matt's picture

Please explain how the US Government, which is barely aware of bitcoin, is manipulating the price of bitcoin when three quarters of the on-exchange trading volume is happening in China in Yuan? 

Today, the price movements are being lead by Mt Gox, but the big moves from $100 to $900+ in the first place were driven by China.

PathForward's picture

Matt, thanks for the feedback - perhaps you're closer to the truth. Cheers.

Scarlett's picture

I cash out regularly; also buy from bitcoinstore with no problem so far. 

Matt's picture

BellyBrain:

Bitstamp (bitstamp.com) seems highly liquid and looks like it should be fairly easy to get your money out.

Right now, I'm using Canadian Virtual Exchange (www.cavirtex.com) because the transfers involve less fees (no currency conversions) and have been very fast so far, priced in CAD, lower liquidity, usually prices between BTC-e and Bitstamp.

Mt.Gox is a money trap, and tends to have the highest prices so I don't recommend it for buying or selling, and I do not consider it an accurate pricing mechanism.

Watch out for the alternate exchanges; there are tons of crappy little exchanges that are not registered businesses that may be illiquid, could be scams, or may get shut down by a government at anytime, if they don't get hacked and robbed first.

Sudden Debt's picture

and have you ever bought anything with it? :)

The greed of the bitcoin holders is what is going to kill it because nobody is spending any you know.

You call it a currency... while you don't use it to buy anything...

makes as much sence as... bitcoins...

CH1's picture

Another ignorant, smary comment.

People buy things with BTC all the time. Thousands of people.

Bitoin has value because it is used, not because it sits in a wallet.

Sudden Debt's picture

so a thousand people use it... that's not exactly a lot you know.

Well keep you bitcoin close and we'll see :)

Scarlett's picture

My price for an ounce gold is around 8 to 9 dollars, you know.. 1.5 btc.

Also got a radeon w9000 for mining litecoin.

Somethings still need fiat, but most things don't.  Even subway franchises are taking it.  

Don't say people don't buy anything with it.  It's not true at all.  

TheHound73's picture

http://coinmap.org/ is a listing of merchants who accept bitcoin.  There may be a few in your area -- the list is growing at an increasing rate.  I expect the list to explode through the end of this year and into next just like the BTC price previously exploded.

A is A's picture

I am tired of this "everyone is just holding bitcoins" shit. Is gold garbage too because we are just "holding" it and don't buy anything with it? Besides, if velocity of a currency is everything, wouldn't BTC skyrocket even more once people really start using it? Saving and wanting to maintain the value of my money in a certain currency doesn't make that currency worthless.

Sudden Debt's picture

well... there's a lot of countries that don't really agree with you on that one...

dark pools of soros's picture

hah look at the village idiot still mumbling about Zimbawweee people using gold to get water or some nonsense...  spin the idiot round and round.. kick the idiot to the ground ...  harhahrhar  HODOR!!!

 

Saro's picture

"have you ever bought anything with it?"

Of course.  I put together a very nice computer about 6 months back through https://www.bitcoinstore.com

Great company. :)

Duke of Earl's picture

That is not necessarily the greed of bitcoin holders.  It is a deflationary asset by design.  Thus, people will always hoard and its value will always go up.

Some define it as a currency, and it can be used as such.  Others define it as a commodity, money, store of wealth you name it.  It doesn't really matter.

It can't serve as a currency now as you point out do to price instability.  However, it does stabilize on occasion and it is used as a currency.  Silk Road should be proof enough.

dark pools of soros's picture

the real shoot up after they closed Silk Road wasn't because it is now clean of crime like the press tried to spin...  it just got great press and proved people used it for 2 years in a market

 

and also, people do not have to buy and hold btc to buy things with btc...  many places charge less fees than creditcards for instant transacations and the online stores sell the items at a discount because of it

 

 

 

margaris's picture

Yes, I recently bought hardware, webhosting and domainnames with bitcoins.

I completely circumvented Fiat to buy those things/services, only half a year ago I would STILL have used Fiat to buy those things/services.

Now not anymore!

So several thousands (measured in dollars) went to BTC instead of fiat...

and that's just me... your average joe.

Kirk2NCC1701's picture

The way coveting, greed, and bubbles work, is that it's only a bubble if you don't own it.

I strongly suggest/request that those who 'hates it', not buy it. That way they can either gloat or wallow in bitter misery some day. Seeing that their position is based more on emotion posing as 'reason', than anything else.

Either way, like for any investment or speculation... Never invest or speculate more than you can risk to lose.

Sudden Debt's picture

I don't hate it.

But all I see is people who act like idiots because they have a bitcoin and who actually believe it's worth a million soon.

It's a typical instrument bought by nerds and if you know nerds... nerds are people who wish to be better than other people but who fail to do so because they're out of touch with the real world.

dark pools of soros's picture

you seem out of touch with protecting your purchasing power

mccoyspace's picture

Aren't nerd redefining the world in their image? Aren't we reading and posting here based on technology developed by nerds over the last 40 years: packet switching, tcp/ip, ethernet, linux, http, DNS, apache, SQL, perl, python, etc etc etc.

Hell, your animated gif icon is based on tech developed by nerds at IBM 25 years ago.

Real is as real does.

BitStorm's picture

Can you describe some of your purchases you've made directly with PMs?

CH1's picture

BTC is "Private" commerce. Remember?

Bangin7GramRocks's picture

Wow, so convenient! I think I'll make my business all bit coin and hire a staff of 500 to handle all the transaction alchemy.

nope-1004's picture

Heeeeeeeeeeeeeeerrrrrrrrrrrrrrrrrrrrreeeeeeeeeeee's

fonestar!