Creeping ping-pong on again at MtGox since jan/04 05:00 UTC. Ping stuck at ~880, pong slowly rising. Real bids/asks largely frozen.

The ping-pong game at MtGox has stopped for a couple of hours now. Volume fell to less than half.

Each transaction has a buyer and a seller. Can you tell whether the buyer and/or the seller is always the same?

My guess is that the ping-pong robot posts an offer to sell and immediately buys into it, or vice-versa. These transactions add to ~100 BTC per hour, and a large fraction of MtGox's volume.

Regarding the original post: whether inflation is high or low, the US dollar is far from "toast". (If it were, then bitcoin would be "ashes" after its recent swings.)

The US government is friendly to bicoin for the same reason it is friendly to day trading and high-frequency robot trading in the stock market, or gambling in Las Vegas. As long as a business takes money from small players and brings profit to large players, it is "good". It stops being "good" only when big players get burned (as they were with Madoff and Enron).

Isn't that the ping-pong I mentioned earlier? My guess is that it is a trading robot that sells to itself, alternating between two prices that increase 1-2 USD every few minutes. Has been going on since 2013-12-30 with a few interruptions.

Yes, some of those buyers may believe that the price will rise above 1200 "soon" and hold on to their coins. But if "soon" may be 1 year, it may also be  5 years, or never. Some of those buyers may prefer smaller but safer gains; some may have to repay loans or buy a car to replace the one they sold...

The point is that there may be as many as ~500 kBTC (from all exchanges) off the books, waiting for bids to build up in the 900-1200 range.

Eyeballing the charts, I would guess that ~300 kBTC were bought at over 900 USD each on MtGox alone.

Some of those buyers may be Believers who will hold the Bitcoins no matter what. But some must be waiting for Traders to raise their bids high enough.  Someone who bought 10 kBTC at 900, for example, may wait until there are 10 kBTC of bids above 900, then dump all at once.

The Traders caught on that trap will of course have to do the same. So the price will probably stay in the 900-1100  range for a long time, sustained not by hope of a bright future but by reluctance to cash at a loss.

Ok, but the ping-pong volume seems to be 2/3 of the total volume at MtGox (between dumps) if not more. And the real spread seems to be fairly constant while the ping-pong limits slowly increase.

Edit: added "(between dumpds)"

Someone is playing ping-pong on MtGox. Ping is a transaction of a few bitcoins at some price X in the gap between the highest stable bid and lowest stable ask. Pong is a similar teansaction at a price Y some 5-10 USD below X. Each transaction seems to be a small bid immediately follwed by a matching ask, or vice-versa.

There is at least one ping-pong per minute, perhaps more. The average values of X and Y creep up by 1-2 USD every few minutes. Sometimes X stops before hitting a substantial wall, while Y keeps creeping up.

The effect is to make the mean price move up steadily for many minutes. Presumably this convinces other traders to revise their orders upward, so the ping-pong can continue creeping up as the nearest sell barriers move out of the way.

This ping-pong has been going on between dumps since dec/30 at least, with some interruptions.

As others have answered, it is not Death but Father Time, a  common image for the year that is ending.

The real question is: why is his sand clock leaking?

Makes sense, yes. Thanks for the posting!

Is that so? Robots that buy at the lowest ask and sell to the highest  bid would lose 10 USD at each cycle. If the rbots are posting offers/bids the other way around, for regular traders, the pattern should be more irregular and in larger lumps, no?

It would make sense to me if a single client was buying and selling to himself, say to pretend that the market is active or to push the price up.

There is apeculiar pattern at Mt Gox / USD that does not occur at Bitstamp ot Btc-China. The price oscillates by 5-10 USD between the lowest ask and the highest bid, with one cycle or more per minute. Volume is very low, less than 10 BTC per minute, or less than 5 BTC per transaction. At each cycle the price at both ends usually increases by a few USD.

This pattern has been going on at least since 2013-12-30, except for a few hours in the early morning of 2013-12-31.  Otherwise MtGox/USD seems to have few transacctions; on some days, less than one per hour.

Curiously Mt Gox seems to have been offline for about 1.5h around 2014-01-01 02:00 UTC, yet the price kept inching up during that time.

Presumably that slow creep upwards of the charted price convinces many traders to revise their bids/offers upwards, so as to remain within a preset distance from the current price.

Does this make sense, or am I allucinating?

Why is the price of Bitcoin now 750 USD, rather than 0.75 USD or 75,000 USD?

Why would a business accept Bitcoin but not Litecoin, Dogecoin, or CitiBankCoin?

Are these charts up to date? http://bitcoincharts.com/charts/volumepie/

There is a thread about this in https://bitcointalk.org/index.php?topic=379425.0

Could it be arbitrage trading?

Whether a country will tolerate or ban cryptocurrencies depends on whether it is good or bad for its economy.China and India have already decided that they do not like it at all. Most countries will likely follow suit.

The US presumably still likes bitcoin, assuming that the successful speculators are, on balance, bringing money into the country. But that may change if some bank or other powerful investor gets burned by it. See the Madoff example.


Marijuana should be unstoppable since anyone can grow it. Yet the US pressures the whole world to outlaw it.  The same could conceivably happen to cryptocoins.

As a currency for global commerce, any criptocoin is in principle as good as any other. All that is needed is a way for customers to change old money for crypto, and a way for merchants to do the oppsite. The choice will depend on secondary factors such as convenience, transaction speed, fees, volatility, etc.

As for investment or speculation, the value of a cryptocoin will depend on its usefulness and scarcity. But if all cryptocoins are equally useful, and their total supply is infinite...

I am totally naive about financial analysis, but my basic statistics tools are unable to find any correlation between changes in price and the price's past history.

To be specific, they tell me that the closing price for the next 1-minute period is the last closing price plus a random variable with nearly zero mean.  This variable has no simple (linear) relation with the earlier 1-minute closing prices.  Knowing the last 5 closing prices is as useful as knowing just the last one.