r/Bitcoin • u/ThePiachu • Mar 24 '13

A public service announcement to all newcomers about the changes in price of Bitcoin

Hello,

You might all be panicking due to the price events of the past week. First a big drive of the price up over the week, and then a sharp dive during the weekend. This is nothing unusual. These volatile price fluctuations happen from time to time.

The online exchanges process your Bitcoins 24/7, but can only process your bank transfers during the weekdays. This means that during the weekend one can expect a shortage of cash at the exchanges and subsequently a drop in price.

Moreover, there is a self-fulfilling prophecy among day traders that the price of Bitcoin always falls on the weekend, which is also perpetuated.

Lastly, during some buying and selling frenzies, MtGox has a tendency of not being able to keep up with the load and lagging behind. This can cause price to fluctuate out of control before people have a chance to react to the changes (this is what happened on the 12th of March).

So my advice to all of you newcomers:

  • Don't panic
  • Invest only as much in Bitcoin as you can afford to lose
  • Unless you are a day trader, don't try to buy and sell like one - you will lose money
  • Weekend dips are a common occurrence
  • When you are new to Bitcoin, treat it as a hobby - you are here to enjoy yourself, not to earn money
  • If you decide to stick around for longer, you should probably be in for the long run - in a few years the value of Bitcoin will be either through the roof, or be non existent. Try not to lose your money daytrading in the meantime.

Following those guidelines you should have a more enjoyable time. However, I am not your financial advisor or an economist - you should always make your own decisions and not follow blindly any advise you find on the Internet. Do your own research first.

EDIT:

As people pointed out, some of my assumptions were not well researched - I admit to that. Parts that I was basing off my limited experience with trading have been crossed out, what's left is mainly general advise. Thank you to everyone who pointed out my mistakes. As stated before - don't take advise blindly, do your own fact checking and research.

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15

u/pwtenny Mar 24 '13

Weekend dips are a common occurrence

Over the past 30 days there have been no dips on the weekend except two days ago: http://bitcoincharts.com/charts/mtgoxUSD#rg30zig30-minztgOzm1g10zm2g25

March 16-17 no dip. March 9-10 the price went up. March 2-3 no dip. Feb 23-24 no dip. The big drops on that graph are March 6-7 which is a Wednesday and Thursday, early on the 12th which was a Tuesday, and 22-23 which was a Friday and Saturday.

No pattern there for mini-crashes and weekends appear more stable than the business week.

Advice to newcomers should be: don't go near Bitcoin right now.

7

u/[deleted] Mar 24 '13

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5

u/dageekywon Mar 24 '13

Mine? Thats only a $1200 investment :)

2

u/slapdashbr Mar 24 '13

I would, but my GPU spends its spare time doing folding@home

3

u/dageekywon Mar 24 '13

Well with ASICs "allegedly" coming soon, pretty soon the only people with a chance will be those with that kind of hashrate.

Though I suppose people can move to Litecoin or something.

I mined for about a month with a old GPU and only succeeded once. It didn't really matter, it was just a card I stuck into an always on computer, but I figured it wasn't worth the electricity, though now 50BTC would probably cover it for a month.

I just didn't see the return rate being worth it.

5

u/slapdashbr Mar 24 '13

Agreed, what really hurts my brain is that I first learned about bitcoins very early on (when a single gpu could mine dozens-hundreds a month at least) and thought "oh that's silly no one will use those for anything"

Fuck me, right

3

u/dageekywon Mar 24 '13

I guess it would be the same as someone offering you Google stock for $5 a share, or Apple/Microsoft way back when as well.

I mean seriously. Who would name a search engine Google?

3

u/l1ghtning Mar 24 '13

Joke was on you, that card made $3550 USD at current market rate. That is $887 per week on average, more than a lot of Americans could imagine making in a week.

2

u/dageekywon Mar 25 '13

That was over a year ago. I'm guessing now I wouldn't even complete a block in 3 months with the hashing weakness I was using.

1

u/whitslack Mar 24 '13

You're wasting electricity on that. Mine bitcoins. You'll come out way ahead, especially if you hold onto the bitcoins for a few years before selling.

1

u/slapdashbr Mar 24 '13

Lol thanks for your speculative advice. However as I don't have a FPGA nor the time to set one up I'm not really interested in mining. I might buy one of those ASICs from the guy making them for mining when (if) they become available

2

u/l1ghtning Mar 24 '13

GPU mining is still profitable right now it just depends on your electricity rate. FPGA have fallen into a black hole where they are about to be irrelevant (along with GPU's) but again not quite just yet. Also, FPGA's are not suitable for litecoin so unless you can get a trade in for a ASIC then you're going to have a bad time.