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First Major Acquistion as Bitcoin Retreats from $100

July 19, 2013 at 6:10 by BitcoinNews

As Bitcoin pulled back from $100 to $89 at the end of the week, the BitcoinTalk forum’s speculation thread has been abuzz with armchair analysts drawing parallels between Bitcoin’s current bounce back to $100 off the 200-day average and a similar bounce off the 200-day in early August of 2011, which also occurred after a major bubble and crash earlier in the summer of 2011.

Certainly, the resemblance of recent price action to this past episode in Bitcoin’s history is uncanny, but the only thing one could say for certain is that this pattern will not play out exactly as the past, or very closely to the even the most skillful Elliot Wave analysis, for that matter. Nonetheless, one chart in the thread projected a repeat of 2011 into the current chart (see charts below). Regardless, the speculation is at least adequate in putting the recent rally into a proper long-term perspective, though it remains anyone’s guess where Bitcoin is headed from here.

The speculation on one Bitcoin company’s shares, however, has now come to an end, as Bitcoin’s first-ever acquisition is taking place in the nearly US$12 million, or more accurately, 126,313 Bitcoin, sale of Erik Voorhees’ Satoshi Dice betting game, Coindesk reports. The company founder stressed in today’s statement, also on the BitcoinTalk forum, that he negotiated hard to provide a 175% premium to the market price at MPEx, the Romanian Bitcoin securities exchange on which the company made its initial public offering (IPO).

The Satoshi Dice founder further remarked, “It is also roughly equivalent to the average price of S.DICE shares at IPO (though BTC was $12 back then, and over $90 today)”. Additionally, several dividend payments had been paid since the public offering, so it is somewhat difficult to understand the criticism of the deal from some investors, many of whom were apparently hoping to be in it for the long term. However, perhaps in viewing the contrast with the astronomical return since its IPO of the now US$150 million ASICMiner shares, investors in this first major Bitcoin acquisition, which seemed to only decline in price since the IPO, are clearly divided over the deal.

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