Hacker News new | ask | show | jobs
by hxta98596 3099 days ago
No. The price never reached a 570% gain so your "most likely" is impossible. The error in the article confusing percentage and multiples is one of a common math errors and the most likely explanation. 382 is 5.7x the price paid or (382/67). That's not 570%. It's 470%.

The most likely explanation is the majority of bloomberg reports know almost nothing about finance or math. Unfortunately and sadly it's still some of the best finance journalism available as there's little competition.
1 comments
rspeer 3099 days ago
When they lose 75% of the money they invested in Bitcoin, they can keep doing the same math and be happy about their "25% gain".
link
hxta98596 3099 days ago
Very difficult to lose 75%. Takes skill. The psychology of traders in any market, especially amateur traders, is such that loss aversion kicks in much stronger and quicker than they realize and many traders will get scared and sell during short term lower % price drops before -75% could even happen to them. Some exit after -20% losses, some hold until -50%. When the moon door opens, losses on the way down are usually spread among many traders trying to catch a falling knife.

The burned traders phenomenon could become a problem for the bitcoin community though few will talk about it. As even if the price recovers after a drop the people who thought they could trade it and lost money when they sold during a short term drop often leave the market and don't return. The same phenomenon happens in the stock market, and stock trading is a ginormous industry compared to bitcoin...amateur traders lose money trading stocks, they leave the market and never return. It's a problem..cue up the next E-Trade baby commercial ASAP! [1]

The Bitcoin big money now knows they need to control the volatility and spend hard and fast on marketing their trading platforms to new people constantly. And that's exactly what these guys behind the scenes appear to be trying to do. Hence we end up with articles like this one: Bloomberg writing about "Bitcoin Traders Claim..." that's basically one interview (at a coffee shop) with one random dude in his early 20s who trades bitcoin in his spare time. Who is the target audience for this 5th grade book report journalism? The churn will be huge.

[1] https://www.youtube.com/watch?v=hashPaU7Dpk

link