Bitcoin’s illiquidity is going to be a huge problem when the bubble bursts

[webfact]

Bitcoin’s illiquidity is going to be a huge problem when the bubble bursts

Jim Edwards, Business Insider US

 

-- Bitcoin is becoming increasingly illiquid.

-- As more people buy bitcoin, the network becomes congested and transaction times get longer.

-- Transaction fees are getting higher, too.

-- This will be a real problem if the price crashes and everyone tries to get out at the same time.

 

This chart shows a seven-day average of the total number of minutes it takes to confirm a bitcoin transaction, since May 2016.

 

Like the price of bitcoin itself, transaction time has been rising as the months go by. Right now, it takes four and a half hours to confirm a bitcoin trade, on average.

 

Blockchain Luxembourg SARL

 

If you are holding bitcoin and worried that the price – which cleared $17,000 last week – is a bubble, then bitcoin transaction times should really start to scare you.

 

Full story: http://www.businessinsider.sg/bitcoin-is-illiquid-transaction-times-2017-12/

 

-- BUSINESS INSIDER 2017-12-19

[mjnaus]

Those who aren't in it for a short term gain, which I believe is still the majority of those holding Bitcoin, won't be selling theirs during the next correction. So the amount of trading does not necessarily have to spiral out of control during the next correction. 

[punchjudy]

Can't be long now until this sucker pops and makes a mess

[mjnaus]

17 minutes ago, punchjudy said:

Can't be long now until this sucker pops and makes a mess

Those who missed the boat have been claiming that for a long time now... Meanwhile Bitcoin is up another 12% the past 7 days 

[phycokiller]

that transfer time is a little misleading and not really relevant anyway, also theres way to much money and long term holders for it to crash in 4 and a half hours

[Calach]

Bitcoins are either on exchanges and online wallets where they can be sold for other assets, or on cold storage which propose Segwit transactions that are fast (just did one, took less than 10 minutes) and will account for more and more of the traffic in the near future. 

 

In any case if the bubble burst that will be the least of concerns, the illiquidity (sigh) issue isn't that but the interrogations behind the solvability or not of Bitfinex and whether they're able to back their USDT (Tether) with real USD. In the case of a crypto sell-off, that would be a much more serious problem. 

[speedtripler]

5 hours ago, punchjudy said:

Can't be long now until this sucker pops and makes a mess

You sound  like a bitter nocoiner..... 

[speedtripler]

Bitcoin isn't the bubble, it's the pin.... The hyperinflated fiat monetary system is the bubble

 

The US Dollar has lost 75% of its value in the last 50 years, I know which one I would trust.... 

[jesimps]

5 hours ago, mjnaus said:

Those who missed the boat have been claiming that for a long time now... Meanwhile Bitcoin is up another 12% the past 7 days 

These crypto knockers remind me very much of the Brexit remoaners. The rermoaners lost the referendum and the knockers missed the massive profits on Bitcoin. They hate to think that others have benefitted from something and they've lost out.

If the whole thing comes crashing down tomorrow you won't find me complaining. I knew the risks when I started and I've had great fun and excitement trading it.

I personally think that although we're experiencing a normal correction at the moment. Because of blockchain, cryptos have a great future.The correction at the moment I think is caused by the large number of ICOs which have come on to the market in the last week or so and so a lot of money has gone from Bitcoin to alts. Also the futures business has upset it, but it recovered after the last futures launch on the 8th so it'll be situation normal again shortly.

 

 

[sanemax]

Has the Bitcoin bubble burst ?

It seems to be in freefall

[mjnaus]

5 hours ago, sanemax said:

Has the Bitcoin bubble burst ?

It seems to be in freefall

It would appear to be healthy correction to a more sane level for now. This has happened several times since it's inception; a rapid increase in a short period is often followed by a slight correction. After which, typically, it will continue rising... Who knows, only time will tell :)

[Monomial]

Honestly, based on past history, I was expecting BTC to hit around $10,000 on this cycle before recovering. It seems to have bounced around $12,000 and is now consolidating before heading back up. One reason I think is that people were unable to sell. The blockchain is overloaded right now and many people that tried to get out simply couldn't. There is alot of anger about this on the various forums.

 

I have had 2 transactions from blockchain.info that I have no idea if they will ever complete. One is at 51 satoshi/byte, and the other at 91/byte. These were the recommended values from Blockchain at the time, but they were quickly swamped by demand. They have been stalled for 3 weeks. The only way to accelerate them would be to pay a ridiculous fee to BTC.com, which currently stands at 0.01 BTC for their least valuable service. That is a hefty percentage of the whole transaction, and just not worth it.

 

There are several hundred thousand of these types of transactions currently floating around out there. Negative sentiment and bad feelings about the illiquidity of Bitcoin is growing, and this is going to be bad for the currency long term. For now however, the demand is off the charts and showing no sign of stopping. For myself, I am locked in until everyone else stops trading and some room opens on the blockchain. Lots of others are in my position too. Just can't get off even if they wanted to.

 

[Monomial]

On 12/19/2017 at 4:49 PM, Calach said:

Bitcoins are either on exchanges and online wallets where they can be sold for other assets, or on cold storage which propose Segwit transactions that are fast (just did one, took less than 10 minutes) and will account for more and more of the traffic in the near future.

 

Lots of people, such as myself, hold BTC on exchanges that allow the individual to control their own wallets. On these types of exchanges, all trades have to be published to the blockchain, and are thus at the mercy of overcrowding. At the peak yesterday there was around 300,000 unconfirmed transactions, and unless the Christmas holiday allows a reprieve, this number looks to steadily increase.

 

My bitcoins may be lost to time unless the popularity of this currency dies down.

 

The illiquidity of Bitcoin is a serious issue, and many investors are rightly pissed about it. Only the very wealthy speculators are able to deal at the moment, and true bubbles don't happen when the small "everyman" investor gets shut out. Segwit makes very little difference, and only a small percentage of miners adopted it anyway.

 

[speedtripler]

4 hours ago, Monomial said:

 

Lots of people, such as myself, hold BTC on exchanges that allow the individual to control their own wallets. On these types of exchanges, all trades have to be published to the blockchain, and are thus at the mercy of overcrowding. At the peak yesterday there was around 300,000 unconfirmed transactions, and unless the Christmas holiday allows a reprieve, this number looks to steadily increase.

 

My bitcoins may be lost to time unless the popularity of this currency dies down.

 

The illiquidity of Bitcoin is a serious issue, and many investors are rightly pissed about it. Only the very wealthy speculators are able to deal at the moment, and true bubbles don't happen when the small "everyman" investor gets shut out. Segwit makes very little difference, and only a small percentage of miners adopted it anyway.

 

The miners are largely irrelevant in segwit, the biggest exchanges haven't adopted segwit and neither have a lot of wallets yet and they could alleviate some of the conjestion if they wanted to..... I use my btc for long term savings so I rarely move them but the Layer 2 solutions on top of the main blockchain  are coming along nicely

[speedtripler]

On 22/12/2017 at 4:17 PM, mjnaus said:

It would appear to be healthy correction to a more sane level for now. This has happened several times since it's inception; a rapid increase in a short period is often followed by a slight correction. After which, typically, it will continue rising... Who knows, only time will tell :)

 

[PattayaAngel]

On 12/23/2017 at 11:46 AM, Monomial said:

Honestly, based on past history, I was expecting BTC to hit around $10,000 on this cycle before recovering. It seems to have bounced around $12,000 and is now consolidating before heading back up. One reason I think is that people were unable to sell. The blockchain is overloaded right now and many people that tried to get out simply couldn't. There is alot of anger about this on the various forums.

 

I have had 2 transactions from blockchain.info that I have no idea if they will ever complete. One is at 51 satoshi/byte, and the other at 91/byte. These were the recommended values from Blockchain at the time, but they were quickly swamped by demand. They have been stalled for 3 weeks. The only way to accelerate them would be to pay a ridiculous fee to BTC.com, which currently stands at 0.01 BTC for their least valuable service. That is a hefty percentage of the whole transaction, and just not worth it.

 

There are several hundred thousand of these types of transactions currently floating around out there. Negative sentiment and bad feelings about the illiquidity of Bitcoin is growing, and this is going to be bad for the currency long term. For now however, the demand is off the charts and showing no sign of stopping. For myself, I am locked in until everyone else stops trading and some room opens on the blockchain. Lots of others are in my position too. Just can't get off even if they wanted to.

 

Me too I sold out at $9,600 and that has proved far too early but... one day it will happen as with   '.Com'

 

PS now in BCH