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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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Sun, 12/08/2013 - 03:01 | 4226255 magnetic_silver...
magnetic_silver_ideas's picture

Good for you. Making bread is definately within your reach. See you're not a complete failure.

LOL.... you have a family... LOL!! USA is fucked for sure.

Sun, 12/08/2013 - 03:21 | 4226273 mijev
mijev's picture

Autually you're both fucked. Even though bread is wonderful tasting, it shares the stage with potatoes as the biggest cause of cancer and dementia and hardened arteries. It's not in the same league as fructose of course (think Steve jobs or any other fructarian) but it is way up there.

Sun, 12/08/2013 - 00:52 | 4226062 magnetic_silver...
magnetic_silver_ideas's picture

"those who have spent years studying economics or numismatics yet you expect us to take to heart anything you have to say." LMFAO

You took years to study economics... really...numismatics.. .really...  nobody expects you to hear anyting.. it's too complicated and you're too slow.

You don't need years to study gold. You just buy it and sell it. You will sell your gold and silver for FIAT?

Where are you going to spend that gold? How do you divide it? How do you prove to someone else its purity? How fast can you move that gold from USA to Africa?

You and the rest of the paid agents on their board are so pathetic. That's the only job you can get because you're unemployable, it's clear.

Sun, 12/08/2013 - 01:44 | 4226159 Seer
Seer's picture

Proof is on you, buddy.

And that math that is so supportive for Bitcoin also has another edge.  There are 7+ BILLION humans on the planet, most of whom don't have access to computing devices (let alone set up with data backups or whatever would be necessary to ensure against loss).  And while the same huge numbers of people might also not have PMs I'm figuring that they'd likely accept some for barter.

The other math problem for Bitcoin is demographics.  Populations are aging.  And, as I've noted previously, older folks (the class of folks that tend to actually have stored/earned wealth) aren't real good at learning new tricks.

Granted, PMs, fiat and Bitcoin ALL require a sense of confidence for there to be acceptance.  I have doubts as to whether Bitcoin could achieve terminal velocity in this regard: it'll be doomed if it doesn't take over fast.  There are a LOT of folks paranoid about a NWO, most which might see Bitcoin as part of an NWO currency; from a marketing standpoint, I wonder, how would proponents of Bitcoin address this?

Sun, 12/08/2013 - 02:14 | 4226196 magnetic_silver...
magnetic_silver_ideas's picture

Your 3 paragraphs of nothing did exactly that.

You're fighting the world, the world isn't going to bow down to your story, no matter how you try to twist it.

How many merchants have started to support gold as a payment method since year 2001? - again... you shriek when pressed.

Your vocabulary and means to explain concepts is that of a 4th grade education and there's nothing you can do about it.

Your gold can't buy intelligence you know... just saying.. probably not smart enough to figure that out.... uncomfortable silence...

If you have guns, use them on yourself. Try not to make a big mess.

Sun, 12/08/2013 - 03:08 | 4226263 mijev
mijev's picture

Nope, that is bs. Most bitcoin transactions will be carried out on a mobile phone. There are 6B cell phones in the world. I only like bitcoins for speculation and sending funds. If you like math but you don't like bitcoins, you need to revisit. Even if you don't buy in, you have to admire the concept.

Sun, 12/08/2013 - 03:21 | 4226276 Manipuflation
Manipuflation's picture

I admire the concept but it requires connectivity to the web.  That is a real problem.  No one is talking about cryptocurrency outside of a major city.  How will you address this fact?   

Mon, 12/09/2013 - 00:39 | 4228389 pipes
pipes's picture

First off, it is a "fact" only in your world. You have made this "fact" up based on your own assumptions.

 

Second, the question of "How will you address this fact?  " is entirely inappropriate, in that it makes multiple assumptions in very few words. One, that this "fact" NEEDS to be addressed at all. Two, that the poster needs to be the one to address it. Three, that, should he address it, you would or could be objective enough to receive it for what it is worth.

 

 

Mon, 12/09/2013 - 00:26 | 4228378 pipes
pipes's picture

See...here's the problem that we will not easily overcome.

 

Folks use words and phrases, never understanding their actual meaning. They make assumptions that to their limited thought processes would seem reasonable. They state as fact that which is anything but - but demand that any rebuttal be based on that (faulty) premise. They offer opinion on that which they have not attempted to understand, and they project their own biases/ignorance on the world at large.

Sun, 12/08/2013 - 00:54 | 4226069 ILoveDebt
ILoveDebt's picture

Your market veterans, if that is what you consider the bulk of those posting on this topic, are not seeking truth anymore than FOX News and MSNBC viewers are.  They are goldbugs that echo each others thoughts about how Bitcoins are obviously Tulips in disquise and then almost always laugh in all capitals - BWAA HAAHAHA.

Because laughing like a maniac really makes it sound like the thing you are ridiculing is crazy and not yourself. 

Bitchcoin, Ponzi, Digital trash, Going to Zero, FUCK Fonestar  -  This is 80% of the comments.

How are any of those educated or exemplary of years studying economics?  You are defending a giant group of gold loving sheep that will not even conceive of any other form of investment as being legitimate. 

And most don't understand cryptocurrencies.  Let's not pretend they do.  There are very few of the proponents on here that understand them.  That is one of the greatest reasons they will lack any form of mass adoption in the near future.  Too many people don't have any idea what they are, why they should have any value, or why they should consider using them.  I understand responding to the guy ranting above, but your defense of the people on this site is a giant misrepresentation of who really posts on here.

Sun, 12/08/2013 - 01:05 | 4226092 magnetic_silver...
magnetic_silver_ideas's picture

0.0000000001% of the world owns gold in physical form of investment grade. These ZeroHedge posters have no meaningful net worth. Anyone with a substantial networth would not be posting rediculous comments on ZH, instead they would be enjoying some fine cavear.

Anyone that is intelligent doesn't need to get all defensive about their intelligence. These are retired military, police, firefighters that are on the troll dole, someone owns them and they have to do this or they mother (pic a family member) with cancer wont' get their meds, or they wont' make rent.

These posters are imposters... LOL! They have no gold, they have no silver, they have no fiat, they have nothing but time on their hands, they're broke ass poor Obama phone supporters, trying to pose as wealthy educated investors...LOL!!

They're so stupid they actually believe the con is working...LOL!

 

Sun, 12/08/2013 - 01:54 | 4226170 Seer
Seer's picture

Oh, I see how Bitcoin works! (you have to tell eveyone how stupid they are so they then rush out and "buy" it)

Are you trying to troll for info for the NSA? (by luring people into telling you what their inventory of REAL stuff is?)

Really, why is it that you feel YOU need to spend so much energy here trying to "educate" folks who are, in your mind, not educated?

I don't push shit here: though I do promote the fundamentals of Food, Shelter and Water; I promote farming (I have no interetest in selling my farm); I also "promote" having a dog or two (I don't breed, sell or train [other than my own] them).  Anyone trying to make a hard sell is, to me, suspicious.

Sun, 12/08/2013 - 02:26 | 4226185 magnetic_silver...
magnetic_silver_ideas's picture

Is that what stupid people do.. .they read ZH, 3rd page comments and rush out to buy stuff...whatever magnetic_silver wrote I must buy.... you're so damaged its beyond repair.

I'm pressing buttons. Big fat fucken bankster buttons that have had their time coming, circa 1 A.D.

Seer, now if that isn't an ego rub what is...  your kind keeps trying... but you think at such a low level that you're oblivous to the tacit admission of your ignorance each post you submit.

You don't get it. The war is won before the first shot is fired. Gold can't reply in kind to BitCoin, it can only yell at it... which is what every poster on this comment board has attempted to do....

But did it change anything... ? nope.

You cannot answer simple questions, even you ask for explanations, because these concepts escape you. Always asking questions, because you have no content, your skull is an empty shelf.

LOL!

Sun, 12/08/2013 - 02:33 | 4226219 Manipuflation
Manipuflation's picture

Seer and I created an LLC that accepts BitCoins in the U.S..  We have recently recieved large orders for our product both domestic and international.  Seer and I decided that we will simply keep the BitCoins and not deliver the physical product.  You have a prepaid order placed with us with the exchange already made.  We took your bitcoins.  What are you going to do about it? 

Sun, 12/08/2013 - 02:42 | 4226228 magnetic_silver...
magnetic_silver_ideas's picture

Okay, this shows you are really much more damaged than original estimates. This is astonishing.

Then you will go to jail. Theft is theft. Crime is crime. But you have a gun, and you're fucken nuts, so you can have a nice gun fight before you go down. Maybe your family will be caught in the firefight. Then you light the fucken house on fire, David Koresh style, and you get lots of news coverage.

Afterall, you're only after attention, not really after solutions.

Sun, 12/08/2013 - 02:42 | 4226232 Manipuflation
Manipuflation's picture

Who will enforce the contract?

Sun, 12/08/2013 - 02:46 | 4226237 magnetic_silver...
magnetic_silver_ideas's picture

The fucken law duffus. The same law that enforces all contracts.

Sun, 12/08/2013 - 02:50 | 4226241 magnetic_silver...
magnetic_silver_ideas's picture

Are you an American, or European, or Kangaroo?

If you're in USA, then UCC takes over all commerce dealings. You can't fuck someone just because you didn't use a Bank Note.

Bank Note is just a tool, used for value.

ORDER is a legal word, meaning you got to. i.e. Purchase Order...  means you gotta send someone something. You don't, you're not fucking with the customer, you're fucking with worldwide principles of trade, credit and commerce. Those Hong Kong BitCoin scammers got caught and are now looking at a lot of jail time. Perhaps, even some execution or head chopping.

Sun, 12/08/2013 - 03:05 | 4226260 Manipuflation
Manipuflation's picture

So now you are going to use the government to enforce your bitcoin contract via the UCC?  I thought BitCoin was free of .gov interference?

I gave you a digital shovel and you used it.  Now we know that you are the government.  You see, the original idea of bitcoin is great and I still support it.  Everything you have said is about yourself and not any of us.  You were sent here to create a dichotomy but you failed to do so.

Go ahead and continue on with your vitriol if you wish but you should not be paid for your puerile effort.  You exposed yourself rather easily. 

Sun, 12/08/2013 - 03:20 | 4226272 magnetic_silver...
magnetic_silver_ideas's picture

Of course the government doesn't have a choice but to ENFORCE THE LAW.

BitCoin if used to settle for value is like a chair.

A chair is not money, but you can trade a chair for money and vice versa.

So if someone takes your PROPERTY and doesn't deliver the product then it's theft.

You can use the courts for remedy, but first you call the police and make a police report.

I never cease to be amazed.

Sun, 12/08/2013 - 03:26 | 4226280 magnetic_silver...
magnetic_silver_ideas's picture

It seems you are making huge leaps of reasoning which do not bridge with reality.

Pardon my abrasiveness, it's that at first you had me confused, I really though you were really stupid.

You're not stupid. You may be intelligent, but clearly mis-informed, and lacking some fundamentals of law and commerce.

Sun, 12/08/2013 - 04:57 | 4226320 Manipuflation
Manipuflation's picture

I might be stupid but you got owned so what does that make you?  More words will not make you any more intelligent.  I will back down a bit and ask a question.  Now that you have fragged nearly every ZHer out there, what do you think your chances are of getting your point across?  Why do you care about us?  Is telling everyone they are an idiot the best way to garner support?  I do not get along with every ZHer out there because I believe they are wrong on some things but perhaps I am wrong on some things too?  Not every ZHer out there likes me either because of some of the things I have said.  We agree to disagree here and respect is tantamount to me.  I don't give them multiple "go to hell" posts. 

What you need to understand MS, is that there are a lot of other types of traders here.  Could be bonds, equities, currency trades or whatever.  Those folks have studied those markets and I do not mess with them because I might learn something from them.  If you can not beat me then you can not beat them either but we are not your enemy. 

You wrote a lot of things and ZHers will read them.  ZHers are quite thorough in their research I have noticed.  Perhaps, and I am not sure of this, but you might be on the wrong website.            

Sun, 12/08/2013 - 14:50 | 4226982 magnetic_silver...
magnetic_silver_ideas's picture

Nobody cares what happens on ZH. Only the small minded that keep asking questions.. "will usa confiscate my gold" LOL!!

This site could go down tomorrow and the sun will still rise.

"What will happen if this happens" LOL!

Only a weak fuck needs someone to agree with their perspective. That's to rub their little ego and give them a sense of accomplishment.

There is no truth on here, just a bunch of confused GMO corn syrup junkies.

You might have most success at godlikeproductions.com, your conspiracy type hangs out there.

Sun, 12/08/2013 - 02:53 | 4226244 magnetic_silver...
magnetic_silver_ideas's picture

Take this the wrong way if you wish, but you're meaningless in the scheme of things. just a pawn.

Sun, 12/08/2013 - 02:20 | 4226206 magnetic_silver...
magnetic_silver_ideas's picture

Don't you fucken buy the BitCoin...

Sun, 12/08/2013 - 02:22 | 4226207 magnetic_silver...
magnetic_silver_ideas's picture

you know the story about the fool and his money

Sun, 12/08/2013 - 13:50 | 4226841 quartshort
quartshort's picture

Soon to be digitally departed. You are a tool.

Sun, 12/08/2013 - 14:49 | 4226987 magnetic_silver...
magnetic_silver_ideas's picture

Yes, your crediblity is oustanding and untarnished. You're unable to reason beyond newspaper articles written to attract the lowest common denominator.

Sun, 12/08/2013 - 04:22 | 4226306 Manipuflation
Manipuflation's picture

"That is one of the greatest reasons they will lack any form of mass adoption in the near future"

 

Perhaps studying the past provides prologue to the future.

Sun, 12/08/2013 - 01:00 | 4226084 magnetic_silver...
magnetic_silver_ideas's picture

Your mind is stuck in group think mode. That is as a result of how your conditioning affects your ability to think.

You think 'us vs them'. No, it's just thoughts in your mind. There is no 'us' or 'them' - it's just your conceptualized perception of the world.

There is no point to being pro bitcoin, neither pro gold. The concept is that you can have new technology change the status quo. That is how man has raised himself from the dark ages, with new ideas.

It appear you would rather stay in your mind made story based world, of "why is the world doing this to me"... instead of allowing the world to be..

Fighting what is will not make it go away. It will simply strenghten it.

Sun, 12/08/2013 - 01:22 | 4226120 bitgroin
bitgroin's picture

Y'all are irrationally anti-bitcoin. If you don't want to buy bitcoin, don't buy bitcoin. End of story. But if you hate it out of jealousy, time to re-examine.

Sun, 12/08/2013 - 02:02 | 4226179 Seer
Seer's picture

Yup, anyone who has reservations about something new (which one is supposed to convert existing wealth over for a loss on the premise that one will be better off) is irrational.

But, yes, I agree, anyone who doesn't want to buy bitcoin should not have to buy it (well, until there's ObamaCoin).  Just as those that don't want to buy farm land ought be free to not buy any.  Sigh, with this last one I can sure empathize with the "struggles," as I see way too many people being way too lazy to do real, physical work...

Sun, 12/08/2013 - 02:20 | 4226202 magnetic_silver...
magnetic_silver_ideas's picture

You make outrageous claims... WOW... you should be in charge of the world with that gift of intelligence.

Watch TV much... you're probably due for your regular dosage of 'programming'.

Sun, 12/08/2013 - 04:18 | 4226302 Manipuflation
Manipuflation's picture

If SEER was running the place it would run a lot smoother and be more efficient and reasonable.

Sun, 12/08/2013 - 14:51 | 4226993 magnetic_silver...
magnetic_silver_ideas's picture

Yah, both of you sound like the right candidates to administer the Obama Care program.

Sun, 12/08/2013 - 01:34 | 4226143 magnetic_silver...
magnetic_silver_ideas's picture

Many of these ZH posters that don't understand BTC have been fed too much GMO Maize... that's why Elsevier is trying to censor the research.. so the drones don't know they've been poised and turn against the mothership.

http://www.theecologist.org/blogs_and_comments/commentators/2187010/scie...

They would like to censor the science of BTC just like the science of GMO maze. Both of which have great ramificaitons to the pocket book of the banksters.

Join the cause, boycott Elsevier, http://thecostofknowledge.com/

Sun, 12/08/2013 - 02:02 | 4226181 Seer
Seer's picture

Great!  Now you're mixing up virtual with PHYSICAL, with FOOD!

BTW - My farm is non-GMO. What about yours?

Sun, 12/08/2013 - 02:08 | 4226188 magnetic_silver...
magnetic_silver_ideas's picture

Only an imposter would refer to GMO maize as food.

Sun, 12/08/2013 - 04:14 | 4226298 Manipuflation
Manipuflation's picture

You know about plants MS?

Sun, 12/08/2013 - 14:50 | 4226995 magnetic_silver...
magnetic_silver_ideas's picture

Always asking questions... because you have no content.

Sun, 12/08/2013 - 05:44 | 4226342 Amagnonx
Amagnonx's picture

'Reports of my death have been greatly exaggerated.' - Crypto-currency

 

The crypto exchanges are filled with penny trading momo's who love to cry 'the sky is falling', however, all evolution is a process of time.

 

For those who do not understand the revolutionary aspects of BitCoin, I am offering a link - BTC is not just a currency, it is quite a lot more.  

 

The following video covers much of what is underneath the surface of the revolutionary protocol that is BitCoin - presented by Stefan Molyneux, not my favorite presenter - but he does an adequate job on the information here.  

 

I recommended commencing at 10.50 - http://www.youtube.com/watch?feature=player_embedded&v=Cs6F91dFYCs

Sun, 12/08/2013 - 12:15 | 4226666 OldE_Ant
OldE_Ant's picture

lmao.  I don't even need to read the PM/bitcoin ZH 9 page smashdown with no-one as a victor.

While I find bitcoin interesting, and yes I knew about it when btc was like .001c/coin the problem is that all transactions ARE tracked, by your wallet codes.  If one were to examine the entire hash tree every wallet account amount would be known.  Who owns those wallets, who knows.   But as soon as a wallet can be connected to an entity (person or company) like when they try to exchange those btc for cash (or anything else for that matter) they can be tracked by following the next wallet the money enters, etc.  (At least that is my understanding)

btc is beautiful and brilliant if you want nearly transparent financial transactions with no central banks involved.  The idea that somehow btc could subvert the entire financial system to be so important to 'become the entire financial system'.  No way in hell.

Hence while interesting, and while I have a tiny bit of btc that grows with each day I see no reason to put money into it.   Strictly speaking I use btc to gamble and that is it.   Started with zero, have some thanks DoChen and associates and growing quickly.  I plan not to put one cent in, or take one cent out.   Someday I may pass it on to my kids or forget about it.

Simply put in many different ages and societies certian real non-needed but rare or hard to make materials were used for 'money'.  This includes FIAT.   What is clear is that over history there are only a few things that actually have REAL value that stands the test of time.

1)   Land/buildings (including good water sources typically)

2)   Women/children/family (i.e. workers)

3)   Weapons/Warriors

4)   PMs

Anything else is something that has not stood the test of time FIAT included.   If you made 1000 or 10000 or 100000% on your btc.   Take some money and run.  If you didn't, well if you want to gamble with some fun money go ahead and buy btc and hope you can find someone else who will pay you more for it later.  Frankly I see btc in a kind of bubble mania.   This YUBBLE environment has been created by none other than the FED and our slave overlords.

A few last comments regarding the article itself.  I was looking at the volumes on these plunges.  I suspect these plunges are individuals selling out of 100, 1000, and 10000 coins they had stashed and banking the cash.  The clue to btc rising will be that the overall volume during these plunges should start to taper off.  Once this occurs btc will rise yet again.   I already am reading a lot of people speculatively trading btc.  

What is the ultimate value that btc could sustain?

Personally if I look at it from a market cap perspective, and the speculative nature of it.  I don't see this fund ever growing much beyond $100B.  Which means the complete and ultimate top will probably be on the order of $5K/btc.  Hence to my mind the btc bubble may have one or two last rises before it levels off and starts the plunge downward.  The final level off point will probably live in a market cap of about $1-5B or $50-250/btc should btc find real use in markets.   If it continues to be associated with 'black market activities' it will be shut down one way or another.

Now return to your regularly scheduled btc/PM smackdown.

OldE - 1FcuSYzb7EZREsBvAmQ298z6DDpxfwQZam

Sun, 12/08/2013 - 17:07 | 4227284 Roger Knights
Roger Knights's picture

The Winklevoss ETF should dampen volatility considerably. (It would allow short-selling, for one thing, and would also make the market less thin.)

Wed, 12/11/2013 - 00:48 | 4235073 Dark
Dark's picture

I lost my government job for violating the internet usage policy by reading Zerohedge at work, but it doesn't matter because I invested my life savings in Bitcoin when it was under $160.  Now I dedicate a fraction to market making and most of it to a buy-and-hold strategy.  It doesn't matter whether the market goes up or sideways, I still make a killing either way.  And nobody is holding a gun to anybody's head to get me my paycheck.

Wed, 01/08/2014 - 08:14 | 4310913 calll
calll's picture
It is not bc a bitcoin uses to be worth only a few dollars that it will not reachs 5000$ a pop in 2014 You can get your hands on your first bitcoins for free here : http://freebitco.in/?r=163799 This is a lottery very well done and very easy to use.You can come back and play every hour; you win a few bitcoins each time you play It is great to learn how Bitcoin works and to win your first bictoins for free, play until you get the first prize. http://freebitco.in/?r=163799
Tue, 01/21/2014 - 13:23 | 4351897 Warrior85
Warrior85's picture

Bitcoin is great for trading or as the Dutch say: handelen in bitcoin

Do NOT follow this link or you will be banned from the site!