Bitcoins 101

grown-ninja

grown-ninja

Active member
Anyone have them? With their popularity and price going through the roof, does anyone on here have a basic 101?

I understand the basics, have read a bunch and still have no clue about things. What's mining? Is there as secondary market these are traded on? I'm in finance so im curious if there's way to short these or to buy options moving forward, or if there are any 'funds' betting the USD/bitcoin rates and other currencies. Is this stuff for real?

I've been looking into the charts lately and trying to make some predictions the same way you would analyze an equitie. Is it even worth my time looking into? Anyone make a lot of money on here recently with them?
 
my advice would not to buy any now. Although they just took a dip in price they cannot keep growing as they recently have, wait for them to settle down to make any purchases.
 
People build computers specifically for mining bitcoins. It's a lot more complicated than you realize.
 
Have you even tried to google anything? Good luck in making a profit in something you have no clue about and apparently don't have the resources to research what you might waste your money on.
 
tanked massively.

50% in like 6 hours.

I feel sorry for a few friends that had some money in bitcoins.

i also heard it occurred due to some intentional and unintentional DDoS attacks, some "investers" sold their and then DDoS to drive the price down so they could buy more and eventually sell them for profit, and the bank run mindset of when they started to tank lead to even more problems
 
Dude are you for real? If you are in/studying finance, you would realize that equities prices are based on the underlying companies' ability to generate free cash flow and in turn, earnings. "Bitcoins" have no earnings and generate no cash flow. This is Finance 101 type shit.

There is no analysis. It is pure speculation. If I had money to speculate I would have bought in today when it dropped substantially since I missed the boat. A lot of people are gonna get burned by this but as long as you buy on the dips and take profits occasionally, you should be alright.

Unless you got in on the ground floor (under $5/coin) I think buy-and-hold here is a losing or potentially extremely risky strategy. Take profits just like you would with any equity that is overheated.
 
^ but if you were talking about Technical Analysis (which I think you might have been), well that is a bunch of BS that doesn't work. Technical Analysis is in direct conflict with the Efficient Market Hypothesis.
 


Not at all

really, I work as an Analyst tthough so I'm bias. If equities were solely based on

earnings the market would be a lot easier to figure out...but it's not.

Example, it’s all (primarily) analysis expectations that move the market: 3 or

4 quarters ago Apple's earning were up 40ish percent period over period,

turnover was at a record high but the stock sold off 5-10% or so. Why? Because

analysts and the street put unobtainable earnings estimates out, that would

never be beat/reached. It happens every earning season-very exciting times for

people like me.

Another example about cash flows: Let’s look at Eagle shipping.

They still have negative free cash flow / operating cash flow (I believe). Their

stock has gone up 30ish% in the last month. Why...because it looks like their

chapter XI exit preceding are continuing to be successful. Yes earnings mean a

lot in the market, but the number sthemselves aren’t the only deciding factor.

There is an

art/science to reading charts too. What I was looking for was if someone has

produced Bitcoin charts that consist of money flow in and out, volumes, moving

averages (which would be amazing if someone did the work)...etc. You can make

very good productions just by viewing 6-12 month charts; even basic ones for

that matter, coupled with recent news can help you make predictions.

I'm not

looking to invest, I’d rather trade...I was looking to make a put option (or

anything similar) right now. But i have no idea if the secondary market for

that type of stuff exists.



 
Stock prices are based off of future expected cash flow or earnings (ie: DCF analysis generally looks 5 years into the future) and people place a price multiple on those earnings or cash flow based on growth prospects, industry, etc.

Both of your examples reflect this. Personally, I would like to see evidence regarding your Apple claim. I'm pretty sure Apple has been declining because people know it's not possible to grow earnings 40% q/q indefinitely, especially when you have no groundbreaking products in the pipeline.

Regarding the shipping company, successful Chapter XI exit proceedings are a positive sign for the market and any financial model would incorporate increased cash flow in the future which would raise the equity value.

Personally, I would never invest in a company like that but that is besides the point. Cash flow and earnings drive stock prices (most of the time). When a company's P/E multiple is no longer justified based on future sales/EPS guidance, the market is going to react and hammer the stock.

Occasionally this doesn't work, as in the case of bubbles like the dot com bust, but more often than not the market behaves efficiently.

And I still believe Technical Analysis is a crock of shit. MACD, RSI, Bollinger Bands, none of that shit works in the long-term. It is in direct conflict with semi-strong form efficiency which implies all public information is calculated into a stock's current price. Since TA is all based on past price data, it conflicts with semi-strong form as anyone would theoretically be able to crush the market.
 
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