Is Bitcoin the Next Big Thing?

[dee]

Ride it while it lasts . I think we're heading towards a cashless society definately, but whether it ends up being bitcoin ...who knows. My gut says something with more accountability. Governments don't like anything they cant control.

I suspect it'll be blockchain based though.

 

[Edwin]

Question for the expert investors: is there some kind of option or similar that pays off handsomely if the underlying stock (or whatever) rises very sharply, but which becomes worthless if it trades in a narrow range or drops?

I thought if something like the above were available for Bitcoin, in both price movement directions, you could take out one betting it will rise really high and the other betting it will fall a lot.

Since the one thing Bitcoin seems to be is volatile, I imagine there’s a very good chance one bet would pay off and one become worthless, leaving you well ahead overall.

 

[dee]

Question for the expert investors: is there some kind of option or similar that pays off handsomely if the underlying stock (or whatever) rises very sharply, but which becomes worthless if it trades in a narrow range or drops?

I thought if something like the above were available for Bitcoin, in both price movement directions, you could take out one betting it will rise really high and the other betting it will fall a lot.

Since the one thing Bitcoin seems to be is volatile, I imagine there’s a very good chance one bet would pay off and one become worthless, leaving you well ahead overall.

not that i'm even vaguely in the expert bracket, but guess you could take out a couple of binary options in both directions ? Trouble is as always, where do you set your take profits ?

The other option maybe to just hedge until the price deviates hugely from say the 100 day moving average, take profit on the one thats in the bucks , then wait for it to retrace back towards the mean and close the one thats in loss , but for far less loss than the profit if that makes sense.

 

[getmein]

is there some kind of option or similar that pays off handsomely if the underlying stock (or whatever) rises very sharply, but which becomes worthless if it trades in a narrow range or drops?

That's the function of a call option, but you'd need to consider timing of this move and what 'very sharply' means - because both of those will have a big impact on the price of that option. In principle a 1 week option on apple stock increasing by 30% in price is going to be very cheap because of the very low likelihood of it happening (both the magnitude of the move and the timing) whereas the likelihood of it happening in 6 months is likely higher, so premiums will be higher.

I thought if something like the above were available for Bitcoin, in both price movement directions, you could take out one betting it will rise really high and the other betting it will fall a lot.

That strategy called a straddle (you buy a put and a call at the same price) and your breakeven is a big move in either direction that will cover your premium costs for both products. I just had a look at some prices for BTC options and the spreads (buy/sell) are pretty big, which is another cost to factor in. Volatility of these products is so high that prices for options products will likely be high - which is going to take a big chunk out of your potential profits. Also have to consider if you've got any counterparty risk one thing if you're buying these options from Goldman Sachs another if it's tradebitcoin.rich and they disappear...

Since the one thing Bitcoin seems to be is volatile, I imagine there’s a very good chance one bet would pay off and one become worthless, leaving you well ahead overall.

The move might just not be big enough or happen fast enough for you to profit over and above all your costs. Lots of other risks in any strategy with BTC - one of the primary ones being execution can you get out when you want at the price you expected - events of the last few days suggest that's not always the case.

 

[Edwin]

Thanks to both of you. I feel slightly less ignorant after those detailed explanations!

 

[dee]

@getmein actually sounds like he knows what he's talking about. SO what he said....

 

[ClassicalGuitar]

Fees on most exchanges can be reduced with limit orders.

 

[dog]

Tezos Saga Continues as Swiss Foundation Asked to Cover Legal Costs
http://blockchain.link/34017562/tezos-saga-continues-as-swiss-foundation-asked-to-cover-legal-costs
http://blockchain.link/34017562/tezos-saga-continues-as-swiss-foundation-asked-to-cover-legal-costs

 

[websaway]

Strange how the B*tcoin price doubled over the last two weeks and yet has not fallen on news of the UK's intention to regulate it's users. One must assume that these moves were suspected by sophisticated investors two weeks ago. Not sure what to deduce from that scenario.

 

[huyatc]

It converts my bitcoin on the fly to buy whatever i want in whatever fiat currency it is in. Appreciating 'real money'.

 

[ausername]

So the bitcoin transaction fee is currently about a fiver.

Can somebody explain to a layman how they can ever get this down to something like 10 pence?

Because nobody is going to want to pay for their Starbucks coffee in bitcoin if they don't?

That seems to be one major flaw at the moment.... how and when will this become cheaper?

If Bitcoin is going to rely on transfer into another cryptocurrency in order to make micropayments, then why wouldn't that other cryptocurrency just be more suitable from the off and become the one which is adopted?

 

[ian]

It is a major floor, but Bitcoin will be able to develop this over time and I'm sure produce something similar; or buy out another existing crypto such as Litecoin that is miles ahead in terms of technology.

 

[martin-s]

Adoption > technology

Proven time and time again

 

[TallBloke]

Nope, bit coin isn't the next big thing.

Crypto Kitties are apparently: http://www.bbc.co.uk/news/technology-42237162

More of a dog person myself

 

[dee]

Nope, bit coin isn't the next big thing.

Crypto Kitties are apparently: http://www.bbc.co.uk/news/technology-42237162

More of a dog person myself

cryptokitties uk now registered

 

[TallBloke]

cryptokitties uk now registered

I thought about it

 

[dee]

I thought about it

I'll sell you it..... much cheapness

 

[ausername]

I hand regged CryptoWallpapers.com the other day, going to whack up a cheap php script and add the odd wallpaper. 'Bitcoin Wallpapers' apparently gets 1k to 10k searches per month, 100 to 1k for numerous other coins. Just an easy little project to give the odd hour to when I need a little break from more serious business.

 

[markb]

Anyone think its a good time to invest in Litecoin or Ripple?

 

[dee]

Ripple is a good buy IMHO.Big things predicted and they are due to escrow about half the supply. I'd wait till it bounces through. On its way down to about 0.2 ish, i reckon over the next day or so before heading up again. Saying that, if you going to hold then won't make much difference.