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[return to "Apple Stops Online Sales in Russia Over Ruble Fluctuations"]
1. mrb+vd[view] [source] 2014-12-16 21:05:24
>>colone+(OP)
It is interesting to watch the effect of the Russian ruble collapse on Bitcoin markets... It is causing an influx of Bitcoin buyers on Russian exchanges: over the last 14 days, BTC is up +11% from 19000 RUB to 21000 RUB with most of the uptick happening in the last 24 hours (https://bitcoinwisdom.com/markets/btce/btcrur) despite being down -13% from 380 to 330 USD on American markets (https://bitcoinwisdom.com/markets/bitstamp/btcusd). There is an opportunity for arbitrage! The ruble is collapsing so fast that even buying at 21000 RUB is a steal (worth 310 USD as of Dec 16 21:00 UTC). And the collapse will likely continue in the next few days and weeks, so the arbitrage opportunity will grow bigger.

Edit: @potench preev.com is an inaccurate indicator of the BTC/RUB rate because it is basing its calculation "based on the USD Bitcoin price" per its footnote, so of course it will never show a big deviation from the BTC/USD rate. For the true rate you need to look at the real-time bid/ask spread on a BTC/RUB exchange such as btc-e.com which is why I linked to https://bitcoinwisdom.com/markets/btce/btcrur or you can also look at https://btc-e.com/exchange/btc_rur: bid/ask is 20855/21099 RUB as of 22:09 UTC, so the arbitrage opportunity is approximately 2000 RUB.

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2. IgorPa+Xf[view] [source] 2014-12-16 21:30:24
>>mrb+vd
From a 10k foot view, you know things are bad when BTC is your stable currency of choice.
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3. jordig+0h[view] [source] 2014-12-16 21:40:42
>>IgorPa+Xf
Honestly, coming myself from a currency that had huge devaluations, the fluctuations of bitcoins' value are relatively minor in comparison.
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4. sillys+8j[view] [source] 2014-12-16 21:59:43
>>jordig+0h
$1200 to $350 is minor?

If people think such a scenario can't easily happen again, then they're wrong about that. A small number of major bitcoin holders mostly determine the price.

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5. venaoy+km[view] [source] 2014-12-16 22:39:46
>>sillys+8j
> A small number of major bitcoin holders mostly determine the price.

Wrong. Your assertion is easy to debunk: if this was true, then, since they hold many bitcoins, why don't they make the price go up to increase the value of their assets? Why do they let it fall from $1200 to $350? Answer: because they can't willy-nilly make the price go up or stop the fall.

The reality is that anybody who is wealthy (the millions of high net worth individuals in the world, which is a lot more people than the ~1000 guys in the world holding 1000+ BTC each) can somewhat influence markets, up or down, but nobody can really "determine the price".

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6. sillys+Um[view] [source] 2014-12-16 22:46:40
>>venaoy+km
The price bubbled to $1200 because Mt. Gox was buying bitcoin for months leading up to that point. This is very well documented. It fell because it was such a large bubble, at the time, that there was no sense letting it do anything except deflate.

Now we're reaching a point that might be a somewhat reasonable valuation for the currency. But my stance here is that even this "low" valuation is extraordinarily precarious. If someone with tens of thousands of coins decides to pull out of the market, they will trigger others to follow suit. Similarly, if someone else decides to buy tens of thousands of bitcoins in order to trigger another bubble, that's quite possible too. Remember, 10,000 coins is "only" ~$10M, which isn't much when compared to the billions that a lot of funds manage. And if someone spaces a large number of buys over a long timescale, it'd be easy to give the impression that the entire bitcoin scene is experiencing healthy, sustained growth, even though that growth is mostly artificial.

This is doubly a problem when you hold a privileged position like a bitcoin exchange, where you can use your position to either manipulate the markets directly or to be privy to info that others don't have. Which, by the way, is totally legal. Even if it's not legal in the US, it's legal in other countries. As far as I know, no one knows who's behind the BTC-e exchange. They're very popular, and they can use that position to do whatever kind of manipulation they want. And since the price at every exchange affects every other exchange (arbitrage), there's no way to avoid being manipulated.

In an unregulated market, you, as one of the multitudes, can't win. Others will always have access to information that you don't, such a whether the growth you're seeing is artificial. You can't win unless everybody wins. And when it comes to BTC, that outcome is far from certain. Especially when people are trying to prey off you.

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