Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities

Archives

Volume Soars on Bitcoin Price Spike; Trader Psychology Drives Rally

November 8, 2013 at 0:26 by BitcoinNews

What’s perhaps even more remarkable today with bitcoin prices topping $300 is that the volume of bitcoin traded is also very high. With over 86,000 bitcoin traded at Mt. Gox and 63,000 at BTC-China, and over 50,000 at Bitstamp, the volume for the top 10 exchanges is clearly over $15 million, whereas just a few months ago $3–5 million was more typical.

Quickly rising prices tend to have a sedating effect on rational thought, while having a stimulating effect on adrenaline and the emotions that go with it, from positive exuberance and excitement to dangerous aggression and reckless risk-seeking. It can particularly lead to fuzzy accounting:

For example, I just bought a game on Steam called the Stanley Parable. In it, you “play” a wholly unremarkable office worker named Stanley who goes about the building to discover some fiendishly clever twists and turns outside his office. And while it was definitely a brilliant and very funny satire, it didn’t take more than an hour or two to discover most of the endings. But $15 isn’t even 0.05 bitcoin at current prices, right? So it’s not too much to pay for the game. Now, I don’t think it was necessarily too much to pay, but that would be the wrong way to think about it.

With such frenzied trading and quickly rising prices, some folks even more prone to errors, separate from the issue of whether or not buying at an all-time high price works out alright for them. For example, two trades were filled at the Kraken exchange at rates of $3,472 and $3,472. Clearly, the orders were erroneously inputted, as the buyer didn’t get much more than 0.1 bitcoin for same amount as he could have gotten more than 1 bitcoin at another exchange.

uSmNYta

 

 

Leave a Reply

required
required  

Navigation

Menu