__Annual dip in bitcoin dominance explained!__ _ bitcoinmarkets rate bitcoin

Slack live chat

I already have an account (login) rules

Be excellent to each other

You are expected to treat everyone with a certain level of respect

Discussion should relate to

Bitcoin trading

Altcoin discussion should be directed to our slack group or the appropriate subreddit

No memes or low effort content

Posts that are solely comprised of memes, irrelevant youtube videos or similar

Will be removed

No accusations of rule violations

Calling out other users for breaking our rules is not allowed.

Instead, please report rule violations

No covert advertising (shilling)

Any affiliation with an exchange, product or service that’s being discussed

Must be disclosed

Exchange representatives

Must get verified

Please send us a modmail

• no private transaction offers

• no hidden referral links

• no URL shorteners

rate bitcoin

• see here for all our rules

Bitcoin exchanges

• GDAX ($, €, £)

• gemini ($)

• bitflyer ($, ¥‎)

• bitstamp ($, €)

This list does not constitute an endorsement by /r/bitcoinmarkets. Please do your own research before selecting an exchange.

Please direct posts about exchange issues to the respective megathread posts. Separate threads about exchange issues will be removed. Bitcoin derivatives options

• bitmex


• crypto facilities

Bitcoin market data

• tradingview

• cryptowatch

• bitcoinwisdom

• coinalyze

• /r/bitcoinmarkets flair data [ ?]

Filter posts

Calendar date


More info

Feb 14

CBOE feb futures last trade – 20:45 UTC, settlement price – 21:00 UTC


Feb 16

CFTC hearing inc cryptocurrency regulation

Live stream

Feb 23

CME feb futures last trade and settlement price – 16:00 UTC


March 7

Next mtgox creditor meeting

rate bitcoin


And the hypothetical profit you’re referring to was from $58,000,000,000 in 2016 of trading (not market cap), which given the example of buying on jan 1 and selling on dec 31 in 2016 (clearly not a real event) where the price rose from $435 to $960.

I know it isn’t the main point of your argument, but these numbers – and therefore the reasoning behind it – are still off: there might be some (or more precisely some trades) that made a profit, but there will be also be some (or some trades) that didn’t made a profit, i.E. That made a loss. It is, practically speaking, a zero-sum game: for everyone whom gains, someone else looses – and hence reduces his/her own capital gain. (the only net variation is when the so-called market cap changes.) so the total net profit (hence the total taxable) will be tremendously less than $31B, precisely because the market cap is of about $15B or $20B currently.Rate bitcoin

I do agree, though, that tax filling (or more precisely tax paying) can potentially have an impact on markets. It is an important factor to consider, thank you for raising that.

Although, another element to keep in mind is that, for businesses (or professional traders), the deadline for paying corporate income tax is not the same one as for filling the tax report – it is often earlier, as strange as it may seem. The government seldom gives you 3 or more additional months before paying your yearly dues. I do not know the dates for that in china nor everywhere else.

• permalink

• embed

• save

• give gold

Also, it’s not such a zero such game when there were no fees to trade, and people with money could (still can with more expense) employ as many bots as they wanted to manipulate prices, and lure others to buy when they moved the price up, and then dump on them.Rate bitcoin

I am sorry to again disagree with you. It is a zero sum game.

At constant price (e.G. BTC is worth $100 at the beginning and the end of the period), if trader A makes $X profit, it means that trader B made a $X loss. Expand further: if traders C, D, E, … Make a combined $Y profit, it also means that traders M, N, O, P, … Made a combined $Y loss. (without counting the fees, which lends the entire balance towards a net loss.)

Now, if the price of BTC increased during that period, it means that there will be a net gain at the end of that period. Likewise, if the price of BTC decreased, there will be a net loss. (there’s some more subtleties to it, but that’s the rough mechanism.)

You cannot have a total net profit (made by all traders) higher than the total market cap – that’s simply impossible.Rate bitcoin remember: for everyone whom gains, someone else losses. And those losses will reduce the tax they have to pay, obviously. It doesn’t matter if people use bots, manipulate the markets, are being paid in BTC, etc. There is a fixed number of BTC (and there always will be), so there is a fixed maximum total net can that can be had over a specific period of time.

Specifically: if there is currently 16M BTC existing (I’m making a round number here), and the price of BTC increased by $600 over the entire year, then the maximum capital gain that there can be for this year is 16M * $600 = $9.6B. That is, is all bitcoin have been purchased and sold, and only during this period. Obviously, not all bitcoin have been traded – e.G. Satoshi’s stack -, some have been purchased before that year, or some have not been sold during that year, etc.Rate bitcoin but all and all, adding all years together, there can never be a net gain larger than the market cap. There’s a finite number of bitcoins, and for every gain, there is a near-corresponding loss, reduced only by the increase in value of BTC.

For the rest, the fact that tax needs to be paid, I agree with you. 🙂

• permalink

• embed

• save

• give gold

You fail to consider the fact that, although 1 coin (if such thing exists) can be traded multiple times, the total net gain will never increase.

An example:

Trader A buys 1 BTC at $1000. Sells to B at $1100. Trader A has a $100 gain.

Trader B sells to C at $500. Trader B has a -$600 gain (or a $600 loss).

Trader C sells to D at 1000$. Trader C has a $500 gain.

Repeat 1000 times, with all possible variations as you main.

In our example, the total net gain is $0:

rate bitcoin

Trader A: $100

Trader B: -$600

Trader C: $500


Total: $0

Even if that 1 BTC is trader 900,000,000 times, the total net gain (of everyone involved) will still be 0. For, as each time someone makes a profit, someone else makes a loss. Zero sum game. Money/value is not created out of thin air.

If the last price would have been, say, $1200, the total net gain (for 1 BTC) would have been $200. That’s the value created overall.

Now, the market cap does have an importance: there are 16M BTC, therefore the total net gain (or loss) will be 16M * [price variation]. In our example, it would be: 16M * $200 = $3.2B (with the nuances expressed above). There cannot be $31B of net profit – you have simply failed here to take into account the losses of others (or of the same traders).

I hope this clarifies.

(edit: formatting for easier reading)

rate bitcoin

• permalink

• embed

• save

• give gold

I am sorry to disagree: bitcoin trading, with its fixed supply, is a zero-sum game, in the sense that: [all gains] – [all losses] = [market cap] – [fees paid]. Always, and forever. (note: the gains here include paper gains, i.E. Unrealized gains. Same things for losses.)

If bitcoin were to suddenly go down to $0 tomorrow morning, you could take your calculator and see that all gains = all losses + fees paid.

If you made a profit on bitcoin, it’s because you sold to someone. For that other person to make a profit, he/she would need to sell it at a higher price. But the price is not infinitely high, the price is only $1050 at the moment. So no matter how many times this specific 1 BTC have been traded and bought and sold, it will never have brought more than $1050 of total net profit, ever. 16M BTC exist, so the total net profit it can ever have brought to humanity as a whole is 16M * $1050 (which is the definition of the so-called market cap).Rate bitcoin

Consider this going up and down a ladder, by adding the steps you go up, and subtracting the steps you go down.

It is often hard for people to see the bigger picture.

Money isn’t created out of thin air (apart from cryptocurrency creation). The profit you have is a loss for someone else, except for when the market cap grows. Zero-sum game.

• permalink

• embed

• save

• parent

• give gold

Thanks for pointing out the error, random guy 534!

Moreover, thanks for being patient and conversing as long as you did! Please accept my apologies for being so stubborn. I had a perfect storm of stupid on my part, from some csv label errors when I downloaded the data, to being up til 3am finishing it, and leaving the final part of the argument in my head. I don’t know how we talked past each other 3 times, but I knew you had a point, but thought you were coming from another angle (BTC alone).Rate bitcoin internet comments are full of trolls, and I think my initial reaction was defensive, and was unable to see the correct answer. (I do better with x is wrong, y is correct, because of z)

Sorry + thanks again!

Here’s the amended example:

If you bought 1 BTC on jan. 1, 2016, and sold on dec. 31, 2016, where the price rose from $435 to $960, you’d have a profit of $525 subject to a 15% capital gains tax of $79.00. If that were applied to the whole token market, which went from $7.1 billion to $17.5 billion in 2016 [3], would mean a profit of $10.4 billion generating $1.5 billion in capital gains taxes.

I’m actually going to delete my comments below, as people have upvoted them, and this will mislead or confuse others as to what we were talking about, and who was right. I think there are some valid side arguments, but they are out of context now.Rate bitcoin

• permalink

• embed

• save

• parent

• give gold