• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Bitcoin Crashes, Loses Half Of Its Value In Two Days

Tyler Durden's picture




 

It was inevitable that a few short days after Wall Street lovingly embraced Bitcoin as their own, with analysts from Bank of America, Citigroup and others, not to mention the clueless momentum-chasing, peanut gallery vocally flip-flopping on the "currency" after hating it at $200 only to love it at $1200 that Bitcoin... would promptly crash. And crash it did: overnight, following previously reported news that China's Baidu would follow the PBOC in halting acceptance of Bitcoin payment, Bitcoin tumbled from a recent high of $1155 to an almost electronically destined "half-off" touching $576 hours ago, exactly 50% lower, on very heave volume, before a dead cat bounce levitated the currency back to the $800 range, where it may or may not stay much longer, especially if all those who jumped on the bandwagon at over $1000 on "get rich quick" hopes and dreams, only to see massive losses in their P&Ls decide they have had enough.

Which incidentally, like gold, is to be expected when one treats what is explicitly as a currency on its own merits in a world of dying fiat - with the appropriate much required patience - instead of as an asset, with delusions of grandure that some greater fool will pay more for it tomorrow than it is worth today. Sadly, in a world of HFT trading, patience is perhaps the most valuable commodity.

As for Bitcoin, while the bubble may or may not have burst, and is for now kept together with the help of the Winklevoss bros bid, all it would take is for another very vocal institutiona rejection be it in China or domestically, where its "honeypot" features are no longer of use to the Fed or other authorities, for the euphoria to disappear as quickly as it came...

Two day chart, showing the epic move from $1155 to $576 in hours:

And longer term chart showing the overnight action in its full glory:

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Sat, 12/07/2013 - 10:31 | 4224145 yogibear
yogibear's picture

Greenspan opened his trap, a clue central banksters would attack bitcoin. Many made hiuge sums pushing it up.

Sat, 12/07/2013 - 10:47 | 4224185 U4 eee aaa
U4 eee aaa's picture

fitting metaphor for Greenspan's mouth

Sat, 12/07/2013 - 11:04 | 4224218 Enslavethechild...
EnslavethechildrenforBen's picture

FOR EVERY PERSON THAT MAKES MONEY, ONE PERSON HAS TO LOSE MONEY.

OTHERWISE KNOWN AS A PONZI SCHEME.

And I'm not sure why he attacks those of us that own Gold. WTF?

Sat, 12/07/2013 - 11:04 | 4224244 mess nonster
mess nonster's picture

BBBBB                TTTTTTTTTTT             FFFFFFFFFFF         DDDD

B        B                     T                    F                        D          D

B BBB                         T                    FFFFFFF               D           D

B        B                     T                    F                        D          D

BBBBB                        T                    F                        DDDD

Sat, 12/07/2013 - 11:21 | 4224285 tmosley
tmosley's picture

Tylers, you DO realize that this happens about once every two weeks, right?

That's why I don't buy unless it has gone down >40% from the peak.

Sat, 12/07/2013 - 11:38 | 4224332 fonestar
fonestar's picture

OH NO!!

CB REVERSE PSYCHOLOGY ATTACK ON BITCOIN!  SELL NOW!!!!

 

(or you can donate those unloved BTC: 18pGo9aLQUtz2r666aBAwQsFsD7wLvBxXb    )

Sat, 12/07/2013 - 11:44 | 4224353 TheFourthStooge-ing
TheFourthStooge-ing's picture

Aaaaaaack! The GLDen idol is tarnished!

Sat, 12/07/2013 - 12:04 | 4224408 BaBaBouy
BaBaBouy's picture

Plllllease STOP COMPARING bitcoin And GOLD ...
Bitcoin Is Electonic FLUFF On Existing On hardrives, NO BACKING (Not Even The
Money Chargers)...
GOLD Is 8000+ Years Old MONEY/HARD METAL, ART, Etc Etc ETC...

Sat, 12/07/2013 - 12:29 | 4224455 Stackers
Stackers's picture

BaBaBouy - like most the "give me gold or give me death" people on this site - you are confusing money and currency.

Sat, 12/07/2013 - 12:39 | 4224475 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Beginning Bitcoin Bearing has two questions for knowledgeable BTC guys:

1) When the price was up around $1200, I presume the ASICs and server farms were running full-throttle to produce them.  One would think that they produced as many as possible, hence making the next BTC even harder to produce.  It would seem like that a big price reduction would slow the production process (more electricity, harder than it was to produce them the last time we were at $600, $800 whatever).  Comments?

2) I am inclined to BTFD as well.  I would especially like to hear comments from gold and BTC fans.

***

My average BTC cost is $800, yes I got in very late, but it took me a while to get up to speed.  Boo hoo hoo!  Can I cry on HER shoulder?  ad over there? ------>

Sat, 12/07/2013 - 12:45 | 4224486 derek_vineyard
derek_vineyard's picture

tylers---by placating to the bit coin fanatics you are gaining short term clicks at the expense of losing most of your truly dynamic posters who tire of the off the subject trending fad of the month.  You are sacraficing quality for quantity.  its all about money...everything is...whats your price tyler?   would you really die for your freedom or are you for sale?  

Sat, 12/07/2013 - 12:55 | 4224509 Harlequin001
Harlequin001's picture

Obviously I'd choose death any day, but just out of curiosity, what 're you offering...

Sat, 12/07/2013 - 13:00 | 4224527 Herd Redirectio...
Herd Redirection Committee's picture

Nah, I'm not tired of the Bitcoin mania yet.  I think it has another couple pump and dumps left in it, but I don't think we will see the magnitude and speed of moves we have had in the last 6 weeks.

Sat, 12/07/2013 - 13:31 | 4224591 A L I E N
A L I E N's picture

 

Didn't Satoshi claim there would be 5 bubbles in Bitcoin before it collapsed?  My count is 2 down and 3 more to go! 

Sat, 12/07/2013 - 13:49 | 4224636 Matt
Matt's picture

If you count the $30 to $2 crash in 2011, we're at 3. You'd have to zoom in on smaller timeframes to see if there were any crashes when bitcoins were worth pennies.

Sat, 12/07/2013 - 15:50 | 4224871 James_Cole
James_Cole's picture

BTC bubble? Unpossible! 

On a related sidenote, btc bugs are getting as bad as goldbugs, quite a feat!

Sat, 12/07/2013 - 16:01 | 4224906 buyingsterling
buyingsterling's picture

Twwwat

Sat, 12/07/2013 - 16:11 | 4224937 mmanvil74
mmanvil74's picture

Remember folks, the DOT COM bust in 2000 did not mark the end of the DOT COM industry, it market the beginning.  

The DOT COM speculators were right, eventually, but yes most people got burned because they invested in the mania rather than comprehending the long term potential and picking their spots carefully.  Most DOT COM businesses went bankrupt in 2000, but early investors in companies like Google made a fortune.  

As for cryto currency we are effectively in the 1990s of the Internet, some will win, most will lose, winners will win big, and the population as a whole wins eventually, unless you want to hide under a rock with your PMs waiting for the sky to fall, then you lose.

Sat, 12/07/2013 - 19:20 | 4225392 duo
duo's picture

yup, and nobody remembers Compuserve, AOL, or Netscape.

Sat, 12/07/2013 - 19:46 | 4225440 fonestar
fonestar's picture

How dare you!

Every year we pause for a moment of silence to remember Netscape Navigator and the sacrifices it made!!

Sat, 12/07/2013 - 21:10 | 4225627 dogbreath
dogbreath's picture

Gawd,  Not another Bitcoin thread

Sat, 12/07/2013 - 21:12 | 4225632 malikai
malikai's picture

FIRE AND BRIMSTONE IN BITCOIN - Episode 4,735

By ZH

Mon, 12/09/2013 - 10:10 | 4228935 N2OJoe
N2OJoe's picture

I love Bitcoin, I just won't own any until I need to use it as a medium of exchange or for some of the wonderful currency features it has.

Until then my money is in money, not currency.

Sat, 12/07/2013 - 14:43 | 4224729 fonestar
fonestar's picture

If you guys don't buy some BTC at these crazy levels fonestar is going to club that baby seal!

 

http://www.youtube.com/watch?v=063wANsIjmE

 

Sat, 12/07/2013 - 19:02 | 4225359 nmewn
nmewn's picture

I'll rent you my baseball bat.

That is...if you have any real money ;-)

Sat, 12/07/2013 - 19:10 | 4225376 fonestar
fonestar's picture

I'm guessing by "real money" you meant to say state-sponsored money? 

Sat, 12/07/2013 - 19:20 | 4225396 nmewn
nmewn's picture

lol...what are you selling "virtually" manufactured BitCoins for bozo?

Real money is gold, silver & copper. I've been trying to tell you...real money...does not need anything outside of itself to be money.

It doesn't need debt (a negative by the way) to become money or electricty, electronic devices or internet.

So, you guys never said how much Jed McCaleb made in "state sponsored" money for selling Mt.Gox. Or what happens when someone infringes on BitCoins patent...you guys gonna go crying to nanny-state for relief?

Sat, 12/07/2013 - 19:32 | 4225417 fonestar
fonestar's picture

I know what "real money" needs outside of itself to be money!  That's simple, it needs people.

Sat, 12/07/2013 - 19:41 | 4225432 nmewn
nmewn's picture

I don't even know what the hell that winds up meaning, there is no reason for money if there are no people.

There is no reason for fishermen if there are no fish either.

You need to step away from the computer dude.

Sat, 12/07/2013 - 22:06 | 4225696 OneTinSoldier66
OneTinSoldier66's picture

I'm not picking sides here. I'm not a DigitalCoin fan supporter, or detractor. I am leery of it/them at this time though.

 

But to put this in the form of a question; I think one way to interpret what he means is, just becuase you say that Gold, Silver, and Copper are money, does that make it so? They may be the best commodities for use as money(have the best properties). But it doesn't make them money just because somone says they are money, unless that person desires to be a dictator.

 

I've gave you an greenie for saying they are real money because I feel the same as you. We have that in common. You and me could easily make a trade if we met up and had something the other wanted. So, to you and I they are money. But apparently not everyone feels the same way as you an me or everyone would be using hard money to transact in. That might change. But you, as well as I, have to live in the real world. Gold, Silver, and Copper are not real money at this time. Why people think that copper-filled dimes and quarters, and zinc-filled pennies are money, I don't know.

 

Well, maybe I do. I'll call it brainwashing. It took me a little while to get the propaganda and brainwashing wiped away, and then start getting educated(which never ends). My hope is that for people that awaken don't end up going, "Why oh why didn't I take the Blue Pill." I know that I'd certainly rather live and die knowing the truth.

Sun, 12/08/2013 - 09:21 | 4226438 nmewn
nmewn's picture

Plus one, I was your number two last night but I needed to settle myself for what I'm about to say.

"I think one way to interpret what he means is, just becuase you say that Gold, Silver, and Copper are money, does that make it so?"

For thousands of years it has been so. That being said, I'm not so much a detractor of BitCoin as a device to move money around...as I am of him.

He was feeding a base human element of greed by pumping this thing all the way up and then as it crashes, holds out hope & faith in future profits (profits denominated in what, he does not say) as its raison d'être. If one is to take him at his word, that makes it a speculation in something and again, not money, as one needs money first in order to speculate/invest.

Freely admitting I'm conservative by nature with a libertarian bent, I can see the utility for a "mechanism" to move after-taxed money around and do with it what you want. Its yours, its no ones business what you do with it. But the device has to have some measure of stability to make it useful, that is, you can't put a dollar in and get fiddy cents out the other end, speculators like fonestar are wrecking its usefulness to move your money through it.

Your larger point about money & how its accepted and recognized as money doesn't escape me though...but rarity of large rocks with holes in them were found to be lacking because of a theoretically positive design feature (hard to steal but also hard to transport) and the also reverse, as seashells are indeed plentiful when just picked up on the shoreline as payment for labor & goods but they devalue the very labor & goods being exchanged by there being so many of them ;-) 

Sun, 12/08/2013 - 13:36 | 4226817 OneTinSoldier66
OneTinSoldier66's picture

+1

 

Cheers

Sat, 12/07/2013 - 20:26 | 4225531 Joe Sixpack
Joe Sixpack's picture

"real money...does not need anything outside of itself to be money"

 

What? You mean real money does not need a server?

Sat, 12/07/2013 - 22:40 | 4225791 TheHound73
TheHound73's picture

It does need a server unless you are transacting within horse and buggy range or sending your real money via pony express and/or ship.  In the meantime your competition is using faster and cheaper means of exchange, pricing you out of the market.

Sat, 12/07/2013 - 23:29 | 4225890 Seer
Seer's picture

"Horse and buggy" can be supported via local trade and farmlands.  Can't say the same about silicon chips and all the oil that is actually required to PHYSICALLY move the shit that the electronic bit ordering triggers.

'My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel'.  -  Sheikh Rashid Bin Saeed Al Maktou

Again, people can talk all they want about what is used to trigger exchanges, and that's fine, but it ALL comes down to having to generate PHYSICAL action, which, I figure, will one day require that horse and buggy that you're attempting to ridicule.

BTW - Oxen and water buffalo are the "work horses" of the world.  Slow and steady wins the race...

Sun, 12/08/2013 - 01:17 | 4226115 TheHound73
TheHound73's picture

Let me guess, you own a coin shop?  What industry are you in that you can spout off like this and still stay in business?  We can speculate about grid failure and Mad Max scenarios but I have competition in my sector Today.  I have customers I need to connect and trade with Today, In The Here And Now...  

Sun, 12/08/2013 - 06:25 | 4226355 Harlequin001
Harlequin001's picture

what, all three of them, and on a Sunday to boot. Take a day off dude.

In fact do us all a favour and take a lot of days off.

Sat, 12/07/2013 - 16:44 | 4225007 tocointhephrase
tocointhephrase's picture

What if "he" said stand at the edge of a cliff, hang upside down for 24 hours or maybe urinate on that electric railway track. bah..baaah., ffs

Sat, 12/07/2013 - 13:38 | 4224613 fonestar
fonestar's picture

Are you kidding?  The mania will end when every single node on the network has shutdown and fonestar has shut up.  The mania is just beginning.  We are so fortunate as humans to be living in two different millenia (rare) and an epochal change like the advent of the crypto-currencies and private space flight.

 

Sat, 12/07/2013 - 14:06 | 4224635 Quus Ant
Quus Ant's picture

Mania is a very apt description.  It will inevitably swing back to its opposite. 

There's a disorder come to think of it.

Sat, 12/07/2013 - 15:34 | 4224833 fonestar
fonestar's picture

"Mania is a very apt description."

Try some of my high cryptose bit syrup and you can do it like me!

Sat, 12/07/2013 - 16:07 | 4224920 thisandthat
thisandthat's picture

Your analogies are telling.

Sat, 12/07/2013 - 17:58 | 4225197 Quus Ant
Quus Ant's picture

At least you're having fun with it. 

Here's hoping you become a virtual gazillionaire, meet a hot virtual bit digger and live virtually forever in a palatial mansion on Second Life. 

Sat, 12/07/2013 - 18:00 | 4225213 Bindar Dundat
Bindar Dundat's picture

I prefer to believe that the U.S. dollar has recovered novcely from it's huge fall last week.

Sat, 12/07/2013 - 20:28 | 4225444 Quus Ant
Quus Ant's picture

Of course that hot bit digger could be a dirk diggler, but you're never cashing out anyway so who cares?  She's got a ticket to ride.

Sat, 12/07/2013 - 13:57 | 4224655 johny2
johny2's picture

it is rare only if the time started aproximately 2014 years ago. 

Sat, 12/07/2013 - 14:28 | 4224713 markelshark
markelshark's picture

The lamborghini dealership caused this crash, expect more:

http://piphut.com/2013/12/bitcoin-let-the-bearish-animal-spirits-begin/

Sat, 12/07/2013 - 16:09 | 4224926 thisandthat
thisandthat's picture

When you put Tesla in the mix...

Sun, 12/08/2013 - 00:41 | 4226034 Kirk2NCC1701
Kirk2NCC1701's picture

This article is already outdated. Check the current price at >700.

Psst, somebody explain to Tyler the difference between a "crash" and "volatility".

And I'd also like to point out the fact that Bitcoin articles generate WAY more reads and comments than PM articles. Very telling.

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