I like the looks of Bitcoincharts plots, but apparently they have some ideological grudge against Huobi and OKCoin, and will not even mention them.  Their volume piecharts are meaningless (and do not say what time interval they cover)

What the charts show is the price of "MtGOX bitcoins" in terms of "MtGOX dollars".  They are not real bitcoins nor real dollars, but merely numbers in the "bitcoin" and "dollar" columns of  MtGOX's internal "client accounts" ledger.

I do not see how one could relate either of those two virtual currencies to the real ones in other exchanges.

Thanks, quite interesting.   

Thanks for your thoughts. I find your analysis plausible.  We saw what happened last Monday.

The only claim that the Slumber Method makes is that 19:00 UTC is the best time to use when trying to infer the general multi-day  trend, if it exists.  It can't help when there is no such trend.

I believe that the market itself cannot remember what it did more than a couple of hours ago; so I assume that any multi-day trend  must be driven by some external variable.  As I discussed before, I saw some clear trends over the last two weeks, which I would ascribe to changes in the total amount of CNY that people are confortable to leave in the exchange overnight.  That amount and the price were constant during the holiday week, then started to decay exponentially towards some limit as the banks opened.  The (First?) Karpeles Catastrophe presumably caused a sudden lump exodus, after which the decaying trend continued.  Then the swings of the past two days may have brought some investors back to the game, hence the new trend starting higher and flat.

We will see.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


             !    Fri !    Sat !    Sun !    Mon !    Tue !    Wed !    Thu !    Fri !    Sat !
  EXCHANGE   !  02/07 !  02/08 !  02/09 !  02/10 !  02/11 !  02/12 !  02/13 !  02/14 !  02/15 ! Currencies considered

  MtGOX      |  58.89 |  26.82 |  23.48 |  50.07 |  18.70 |  25.21 |  33.85 |  79.56 |  60.15 | USD,EUR,GBP,AUD,JPY
  Bitstamp   |  42.79 |  13.50 |  15.06 |  71.86 |  40.06 |  15.51 |  28.15 |  63.38 |  20.76 | USD
  BitFinEx   |  66.36 |  11.12 |  12.07 |  41.98 |  39.54 |  12.85 |  17.17 |  53.68 |  10.83 | USD
  BTC-e      |  31.84 |  11.67 |  12.51 |  47.04 |  28.64 |   9.97 |  18.53 |  52.18 |   9.16 | USD,EUR,RUR
  Kraken     |   1.45 |   0.37 |   0.45 |   1.45 |   1.11 |   0.58 |   0.93 |   1.79 |   0.41 | EUR
  Bitcoin.DE |   1.30 |   0.37 |   0.47 |   1.54 |   0.67 |   0.51 |   0.78 |   1.63 |   0.22 | EUR
  CaVirtEx   |   1.07 |   0.57 |   0.23 |   0.77 |   0.53 |   0.29 |   0.41 |   1.16 |   0.15 | CAD
  CampBX     |   0.82 |   0.27 |   0.24 |   0.37 |   0.11 |   0.10 |   0.21 |   0.41 |   0.05 | USD

  SUBTOTAL   | 204.52 |  64.69 |  64.51 | 215.08 | 129.36 |  65.02 | 100.03 | 253.79 | 101.73 |

  Huobi      | 131.91 |  77.00 |  64.08 | 134.09 | 120.08 | 131.86 |  82.39 | 236.27 | 122.80 | CNY
  OKCoin     |  74.37 |  37.63 |  34.63 |  70.49 |  64.22 |  60.79 |  62.49 | 147.26 |  51.45 | CNY
  BTC-China  |  17.66 |   6.86 |   5.75 |  18.23 |  11.17 |  11.01 |   8.02 |  24.87 |   7.55 | CNY
  Bter       |   0.51 |   0.26 |   0.33 |   0.85 |   0.76 |   0.69 |   0.65 |   1.54 |   0.74 | CNY

  SUBTOTAL   | 224.45 | 121.75 | 104.79 | 223.66 | 196.23 | 204.35 | 153.55 | 409.94 | 182.54 |

  TOTAL      | 428.97 | 186.44 | 169.30 | 438.74 | 325.59 | 269.37 | 253.58 | 663.73 | 284.27 |



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

The exchange Bter was added to Bitcoinwisdom's menu on 2014-02-15; its volumes for 02/07 to 02/14 have been added
retroactively to the table.

Coinbase is said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

In spite of the epic fails of the last two predictions, let me try again for tomorrow.

We now have two apparently reliable Slumber Points on Huobi's chart (feb/14 = 4008 CNY, feb/15 = 3961 CNY); let's call that a trend. 

Extrapolating in a straight line gives ~3915 CNY for Huobi. Dividing by R = 6.12 we get ~640 USD for Bitstamp.

Therefore:

Prediction valid for: 2014-02-16 19:00 to 19:59 (not before, not after)
Huobi: 3885 -- 3945 CNY (3915 plus or minus 30)
Bitstamp: 630 -- 650 USD (640 plus or minus 10)

Defective predictions will be replaced or repaired, at our discrection, if mailed back to the factory in the original container.

For whateer it is worth, here is the report on the Chinese Slumber Method predicition for today.
The prediciton was way off, of course.

Prediction posted on 2014-02-15 00:46:51 UTC
Prediction valid for: 2014-02-15 19:00--19:59 (nor before, not after)
Huobi's predicted price:  3620 -- 3670 CNY (3630 plus or minus 40)
Huobi's actual price (L -- H):   3948 -- 3973 CNY (3961 plus or minus 13)
Error between interval centers: 331 CNY

The prediciton is the rightmost blue rectangle in the chart below.  The Yellow dots are the mean hourly prices t 19:00 every day.


Bitstamp's predicted price: 575 -- 625 USD (600 plus or minus 25)
Bitstamp's actual price: 643 --652 USD (648 plus or minus 4)
Error between interval centers: 48 USD

In the chart below, the red/green strokes are actual Bitstamp prices, but the yellow dots are Huobi's mean prices at 19:00 every day,
divided by the currency factor R (6.40 for feb/07--feb/09, 6.12 all other days).


EDIT: explanation for Bitstamp's chart.

That was the common belief before China showed how easily it can be done.

I do not see how the blockchain could be maintained if the US government decided to stop Bitcoin.


Not like to brag, but I first used the internet in the fall of 1979, which meant telnet, ftp, e-mail and mailing-lists; and by 1993 I was already an unwelcome presence on the first prototypes of internet forums.    Mosaic was my first browser and Altavista my first search engine.  I used Google when it was still a student's project based at Stanford; I did not consider it a "risk" then, but now I see it as a huge risk for all mankind. 

( But I am not THAT old either.  The first computer that I used already had transistors, not vacuum tubes. Except for a dozen of these on the front panel: http://en.wikipedia.org/wiki/Nixie_tube )

Not at all.

The existence and survival of altcoins only invalidates the old "proof" that the price of a bitcoin will be astronomical because there are only 21 million of them.  

Cryptos (including Bitcoin) may still succed as methods of payment, and if so each obviously will have some price.

How that price will be set, and how many figures it will have in USD --- I don't see how we can tell at this time.

I agree that "legal" is not "moral" and often opposite to it.

But I am not a libertarian -- I believe that government, laws, taxes, etc. are necessary, we must fight to improve them, not to abolish them.

So what I meant is: if bitcoin will only (or mostly) be used for illegal activities, I wiill not consider it as being a success.

Not that I think that to be very likely, though. Given Silk Road and all that, I would say that bitcoin is worse than banks for those purposes...

Thanks to all the Voltaires who welcomed me here, moer or less 

I will try to keep my negativism to myself.  I wish that things turn out as well as possible for everybody...

I genuiney do  not know.  Technically of course it is not necessary, but I thought that Huobi might require it in order to simplify BTC withdrawals or whatever (just as it might require clients to provide a bank account for CNY withdrawls).

Note that I have not opened an account anywhere.

I think I already answered that earlier today or yesterday...


I will be happy, and count it as a success, if bitcoin becomes a viable and attractive alternative to credit cards for legal international payments via internet.  By "attractve" I mean one that many people will chose to use for its merits (convenience, price, safety, etc.), not for political motives or because they have invested in Bitcoins and want to encourage merchants.

Right now it is very far from that landmark, wouldn't you agree? Already I know that I will not be able to pay a hotel bill in China, for example.


Buying a lottery ticket is always a bad investment, because one can compute the expected payoff, and it is negative.

If one buys a ticket and wins the jackpot, still was a bad investment. 

A good investment is one that, according to the best knowledge and judgement available at the time, gives a positive expectation of return.  But there is no way to measure the probability of an event, either before or after the fact.  Therefore, there is no way to determine empirically that something is a good investment before the fact, and no way to tell whether if it was a good investment after the fact.

Only in very few cases cases --- such as lotteries and other games --- there are proabilities that everyone would agree to, and therefore one can "prove" that something is a bad or good investment.  Most of the time, probablities are subjective and personal, and so is the notion of "good investment" or "bad investment".

If someone invests in Bitcoin and gets filthy rich, good for him; but can you tell whether he was wise, or just lucky but stupid?

Last year the Brazilian oil company OGX filed for bankruptcy.  Its stock price had multiplied by 10x in a couple of years (from 2 BRL to 24 BRL, if I recall correctly), which is fantastic in that market.  Then it crashed in a few days, after it became known that its two deep-sea oil wells were nowhere as productive as it was hoped.  Its shares are still traded today as a penny stock, 0,15 BRL in november, 0.30 BRL now.

OGX had several billion dollars of real money invested into it by many people. Were those people bad investors? I would not say so, they apparently did their homework and got positive expected value at the time. 

Some of the original investors must have sold at the peak and made 1000% profit, some didn't and had 100% loss.  Were the former better investors than the latter?

Or, to be more dramatic -- someone plays Russian Roulette ten times for a 10$ bet, and wins. Would you call that person a good investor?

(That reminds me of a great little movie called /Number 13/ -- not to be confused with /Number 23/.  But I saw the French BW original, cannot vouch for the remake.)

Thanks for the links.  The peaks seem to match significnt changes in price and the growth of the "market".


Interesting too. 

Are those numbers complete (e.g. could the Chinese be downloading the software from a local source not counted in those graphs?)

My picture of the typical Huobi client is a low or middle-class person, who does not understand English, has no programming knowledge, and keeps his bitcoins in his Huobi account.  He cannot use bitcoins to pay for things in China and does not usually travel outside the country.  Would he need to download the software and/or create a private wallet in order to open an account at Huobi?

I do not intend the term as negative.  But the use of bitcoins for speculation or store of value is a side effect that is not strictly necessary for its goal (cheap safe etc. payment via internet) and may be a an obstacle to it.

I have yet to see a convincing model (with numbers) of the bitcoin economy in the bright future; much less how we can get from here to there without being steamrolled along the way by banks, governments, and other competitors like Apple and PayPal. (I read somewhere that PayPal is already blocking any payment related to bitcoin.)

The fast increase in value, for example, seems to have attracted a lot of undesriable players (greedy speculators, shady investors, incompetent businessmen, scammers...) which are already harming the project's image.

yes, it is me...

I can see the potential utility of cryptocoins (apart from a host of economic problems that have no stisfactory answer yet) and I wish that they would succed.

But the issue is whether Bitcoin is a good investment now.  That depends only on whether its price will increase, by how much, and when.

So, isn't "the market is saturated" a very good argument to doubt a further increase in price in the next fewyears?  For another rally like november's one would need to get a substantial number of  people buying substantial amounts of bitcoins for long-term investment or speculation.  It is the Bitcoin "salesmen" who should explain where those investors will come from (and why they will not invest into Litecoin or Google instead).

As for the longer term, I have already given several reasons why I believe that Bitcoin is unlikely to succeed (not "certain to fail"), and why the old arguments of the "salesmen" have lost their bite.   Have you seen my earlier posts?

I have no idea of how many people use bitcoin for legal commerce.  Is there any solid estimate, somewhere?

Huobi's CEO claims that he has 10,000 active clients.  I would guess that no other exchange has more than that.  So we have perhaps 50,000 active clients
in total.  Granted, those are speculators, not users.

However, I would guess that less than 1% of all trade at the exchanges is people buying BTC to buy legal stuff.   People who keep moving bids and asks up and down to follow the price are speculators, and they seem to  generate most of the volume.

That would mean less than 3000 BTC/day, or 2,000,000 US$/day used for commerce.  If the average purchase is 100 $, that would be less than 20,000 users.

Those are just guesses, loosely based on what I see on the charts.  I would love to see real data.

Feel free to ignore me. I am a Teacher, I have 40 years of experience at being ignored while I speak. 

They obviously and naturally do not want to be prosecuted for fraud. 

Other exchanges will probably follow with similar warnings.

I wonder if this move was inspired by explicit legal threats, against Bitstamp or elesewhere.