Little explanation for the price rise
I was shocked to wake up this morning and find that the price of bitcoin was up 5%. On the other hand, altcoin prices did not rise along with bitcoin prices, causing the mining pool to lose 1.7% yesterday due to slippage. When you export toys from China to the United States, you want the yuan to be weak so that you earn more yuan for the dollar. Bubbles are going to be a problem in the future, and I hadn't previously considered the fact that bitcoins go up more often than they go down in our original profit calculations.
There doesn't seem to be much of a reason for the rise. I've never believed that news drives the long-term cycle, but when absolutely nothing is happening, you need to question what the people who know more than you do are aware of. A 5% rise is not common anymore.
I wouldn't pay much attention to this for now and still remain bearish. However, if the price is suddenly at $620 tomorrow, we should start looking into what the bigshots know that we don't. As a reminder of recent history, the last time the price changed 10% in a few hours, the auction was announced a few hours later.
Outrage over New York regulations fades
As expected, the outrage over the New York regulations has faded. I'm going to start a new countdown to the 45-day comment period's end. The end of the comment period isn't relevant for the price of bitcoins or their adoption, since there is still time after it ends before the bureaucrats will make an announcement. However, the 45 days is important because it is the time that people have to let people know their opposition to the rules.
Like every other thing that's ever happened, people get mad right after the disaster occurs. If a car runs off a mountain, then taxpayers are more than willing to pay to upgrade the road. By the time the construction begins, though, there have been no more accidents and people question why their money is being wasted on something that is unlikely to happen again. Eventually, the project is cancelled.
This is what is going to happen here. For five days after the announcement, /r/bitcoin was flooded with negative news about the regulations. Now, you barely hear anything about the most significant thing to happen to bitcoins in years. By the time the 45 days is over, I wonder if people will simply have forgotten about what is happening, and simply resign themselves to moving their businesses out of New York.
Who likes these rules?
I find myself wondering why the New York regulations were proposed with such strict rules because I can't reason a motivation for creating them. Who is it that actually supports these rules?
Is it bitcoin businesses? No, because the rules don't allow them to make profits in bitcoins. Banks who want to stifle their competitors? Possibly, but the compliance costs for banks will be far higher dealing with bitcoins than they are dealing with dollars. The people of New York? This one seems hard to believe because there is little public outrage over the evil terrorists who are spending bitcoins. Consumers of bitcoin services? In the past, consumers clamored for a better exchange that Mt Gox, but there are now far better companies that provide services of a much higher quality.
It's difficult to figure out exactly who will be in support of these regulations. Where are the blogs praising Lawsky for his efforts? I haven't read any that think this document should pass.
Coinbase taking significant PR hits
Coinbase is taking significant public releations damage in recent times as it cancels accounts of people accused of various things without allowing the user to respond. In many of these cases, what the user is accused of doing isn't even illegal.
Coinbase had the opportunity to become the Verizon of the bitcoin world. Years back, Comcast worked with the government and with media companies and divulged personal information to these companies about users who downloaded copyrighted pornography. Verizon got fed up with the DMCA requests and told them to sue, after which most of the copyright trolls stopped harassing their customers. Coinbase has gone even further than Comcast's approach, siding against the customer even when there is nobody asking them to do so. It is never a good idea to alienate customers, as some studies indicate that one negative comment on a website can cost three customers to a company.
On the other hand, Circle yesterday basically gave away money to people for no reason at all, providing $50 to anyone who used a credit card to buy bitcoins regardless of whether that credit card was charged extra fees or not. Where Circle is able to get all this money escapes me, but if they can launch a service that undercuts Coinbase, the negative publicity Coinbase has received recently will start to come back to haunt them.
Time is running out
I said earlier in the year that all that bitcoin needs is one bubble to secure its supremacy as the cryptocurrency of the future. But with this cycle having been missed, other altcoins and currencies continue to launch and grow, threatening bitcoin more and more every day.
The latest entrant is "stellar" at http://fortune.com/2014/07/31/stripe-la ... -for-free/. The exact properties of stellar aren't important; what is is that bitcoin still hasn't locked in, and that gives venture capitalists an opportunity to replace the network with a corporate-sponsored product.
I'm going to sign up for this service when it is available and sell my free coins immediately. Maybe I can earn a few bucks at the same time as I help the bitcoin network.
Other
- Days until the comment period is over: 36