Puddles Posted February 26, 2013 Share Posted February 26, 2013 Let's analyze the sudden spike of key prices. Everybody's getting their jimmies in a tangle about the retarded increase in key price, so I took some time to look at the underlying factors. Exhibit A: TF2Finance's graph on key prices Exhibit B: TF2Spreadsheet Scandal If using the 6 month view on the graph, you can clearly see that key prices began to gradually slope upward in mid August. It was at this time that the TF2Spreadsheet scandal surfaced on the /tf2trade subReddit. People stopped trusting the very popular tf2spreadsheet that was a predominant tool among traders at the time. They turned to Backpack.tf, which negated the possibility of one individual manipulating the prices of various TF2 items for their own benefit. This gradual slope reflected a much needed inflation in the price of keys, which had remained relatively stable in the 2.33-2.44 range for the past few years. On the same graph, you can see a small flag labeled "F" that demarcates the Halloween update in late October through early November. Because Halloween unusuals are more scarce on the TF2 market compared to regular unusuals, traders were more willing to risk their keys on opening crates. This led to an increase in the demand of keys. Supply did not see a significant increase, and as such, key prices spiked, and rightly so. Prices went up to 2.77-2.88 ref. However, the problem lies in the fact that the Halloween "spike" never actually spiked. It just sharply increased. A spike implies that prices eventually go back down. It is at this point that you can truly see how backpack.tf's hyperactive, contribution point-whoring price suggestion community (Calling out Long218 right here) caused an unprecedented hyperinflation of key prices. By no strange coincidence, these suggestors own hundreds of keys themselves. These suggesters would only look at the sell-side of keys, citing multiple TF2Autpost trades as proof. These suggestions would get upvoted, mods would approve them, and the keys price would go up by one scrap. Responding to the increase in price, Autpost sellers would in turn increase their key prices by one scrap to reflect the increase of backpack.tf's newly updated price. Within 24 hours, point whores would see this increase and race to be the first one to create a new price suggestion on Backpack.tf The vicious cycle of BP.TF suggestion > Autpost key price increase > BP.TF suggestion > Autpost key price increase led to the insane 50% increase in key price over the past 6 months. This cycle could be easily controlled if Backpack.tf admins limited key price updates to once per month. If a key price was updated on January 26th, nobody would be able to suggest a new price until February 26th. This would help control the key price inflation and curb price update whores. Thoughts? Link to comment Share on other sites More sharing options...
Pyrocide Posted February 26, 2013 Share Posted February 26, 2013 I wholly agree on the major points except that I do not agree that Long and some of the other Key Hoarders are posting for personal gain. Now then, with that said, if Long was downing the price of buds to buy with keys, inflated key price and therefore caused an increase in bud price then resold them and continued this, then i would say it was for personal gain, but from what I have seen although he does report most out of every key suggester I cannot definitively say that he is or isn't doing it for personal gain. Link to comment Share on other sites More sharing options...
Woifi The Viking Posted February 26, 2013 Share Posted February 26, 2013 Maybe start a experiment for 1 month. But because 1 month is quite long, maybe just 1 week. Link to comment Share on other sites More sharing options...
Sheep Posted February 26, 2013 Share Posted February 26, 2013 I agree to mostly everything here except for the part where Long is trying to make money out of this. His BP is like worth $2000, from what i've heard this will only help him gain $17. And honestly i don't think if i had that much money already, that i would be doing this just for $17. Link to comment Share on other sites More sharing options...
Jymotion Posted February 26, 2013 Share Posted February 26, 2013 His BP is like worth $2000, from what i've heard this will only help him gain $17. And the value increase would be completely artificial anyway. Changing the value of a key in terms of metal on bp.tf does not necessarily change what $USD value they are selling for. This cycle could be easily controlled if Backpack.tf admins limited key price updates to once per month. Honest question: why does it need to be controlled? I'm not happy about the fact that I can't easily afford keys anymore, but I also accept the fact that keys are a commodity and they are moving towards an equilibrium. Why did not one suggest limiting B.M.O.C. suggestions when they were dropping rapidly? I understand the difference between them (i.e. keys are currency), but we can't just identify rapid price change as a problem just because we can't afford as many things anymore. Link to comment Share on other sites More sharing options...
AwesomeMcCoolName Posted February 26, 2013 Share Posted February 26, 2013 And the value increase would be completely artificial anyway. Changing the value of a key in terms of metal on bp.tf does not necessarily change what $USD value they are selling for. Honest question: why does it need to be controlled? I'm not happy about the fact that I can't easily afford keys anymore, but I also accept the fact that keys are a commodity and they are moving towards an equilibrium. Why did not one suggest limiting B.M.O.C. suggestions when they were dropping rapidly? I understand the difference between them (i.e. keys are currency), but we can't just identify rapid price change as a problem just because we can't afford as many things anymore. +1 Also, i feel the need to point this out, with or without bp.tf key prices would still go up anyway, and the only thing that would come out of not listing prices is newer traders would sell their keys to cheaply. Think about it... The larger traders are buying keys @3.77 Refined....At some point they will all be bought up, and the only ones left will be those large traders (who are now selling those keys for 3.88). 3.88 will be the only price around, buyers will up their buy and sell price, and the cycle countinues....bp.tf just protects the newer trader Link to comment Share on other sites More sharing options...
Puddles Posted February 26, 2013 Author Share Posted February 26, 2013 Honest question: why does it need to be controlled? I'm not happy about the fact that I can't easily afford keys anymore, but I also accept the fact that keys are a commodity and they are moving towards an equilibrium. Why did not one suggest limiting B.M.O.C. suggestions when they were dropping rapidly? I understand the difference between them (i.e. keys are currency), but we can't just identify rapid price change as a problem just because we can't afford as many things anymore. Because it's not going towards equilibrium. Equilibrium is where supply and demand coincide, but the prices are solely being based on the supply side (sellers post for x price on autpost, backpack.tf updates price, sellers post for x + 1). Link to comment Share on other sites More sharing options...
Puddles Posted February 26, 2013 Author Share Posted February 26, 2013 The larger traders are buying keys @3.77 Refined....At some point they will all be bought up, and the only ones left will be those large traders (who are now selling those keys for 3.88). 3.88 will be the only price around, buyers will up their buy and sell price, and the cycle countinues....bp.tf just protects the newer trader So much is wrong with this statement. There are 467,000 keys in circulation. Even at the trader market price of $1.30, it would still cost traders a total of $607,100 USD to buy all of the keys at 3.77. And yes, they will at some point all be "bought up" but will also continue to be sold. The key market is large enough where the top 25 traders don't have that much of an effect on key prices. Link to comment Share on other sites More sharing options...
The Killjoy Posted February 26, 2013 Share Posted February 26, 2013 Because it's not going towards equilibrium. Equilibrium is where supply and demand coincide, but the prices are solely being based on the supply side (sellers post for x price on autpost, backpack.tf updates price, sellers post for x + 1). Most actual changes in bp.tf key's price are based on tf2finance. tf2finance tracks actual trades, not just listing. Which means that the buyers ARE buying at this "x + 1 scrap" price in mass, thus, making it the price as of now. I do agree with a one week experiment though. 1 month feels a bit much. Link to comment Share on other sites More sharing options...
Puddles Posted February 26, 2013 Author Share Posted February 26, 2013 Most actual changes in bp.tf key's price are based on tf2finance. tf2finance tracks actual trades, not just listing. Which means that the buyers ARE buying at this "x + 1 scrap" price in mass, thus, making it the price as of now. I do agree with a one week experiment though. 1 month feels a bit much. The only reason people buy the keys at x + 1 are because backpack.tf says that price is within the range. Backpack.tf has grown to the point where it literally dictates the prices of items, and traders will (blindly) follow. Link to comment Share on other sites More sharing options...
Jymotion Posted February 26, 2013 Share Posted February 26, 2013 Because it's not going towards equilibrium. Equilibrium is where supply and demand coincide, but the prices are solely being based on the supply side (sellers post for x price on autpost, backpack.tf updates price, sellers post for x + 1). If that were true, then they wouldn't be selling. The same can be said for buyers, who have consistently been raising their buying price. It is absolutely moving towards equilibrium. Eventually the quantity demanded (from the people who can afford them) will be more or less equal to the quantity supplied (from the people who are willing to sell them). Currently, the quantity demanded is far larger than the quantity supplied. Illustrated: When we were at 3.0, F people wanted keys, A were supplied. Price rose, fewer people E could afford them, more people B sold them. This continues until we reach equilibrium at * In theory anyway. edit, to more directly address the topic: Monthly key suggestions would do nothing but cause part of the site to be outdated. Link to comment Share on other sites More sharing options...
Puddles Posted February 26, 2013 Author Share Posted February 26, 2013 If that were true, then they wouldn't be selling. The same can be said for buyers, who have consistently been raising their buying price. It is absolutely moving towards equilibrium. Eventually the quantity demanded (from the people who can afford them) will be more or less equal to the quantity supplied (from the people who are willing to sell them). Currently, the quantity demanded is far larger than the quantity supplied. Illustrated: When we were at 3.0, F people wanted keys, A were supplied. Price rose, fewer people E could afford them, more people B sold them. This continues until we reach equilibrium at * In theory anyway. edit, to more directly address the topic: Monthly key suggestions would do nothing but cause part of the site to be outdated. Except that's assuming we're working with a relatively free economy. Today's tf2 economy is much more similar to a command economy. Backpack.tf has grown so popular that deviating from its posted prices is unthinkable. When people post "proof" of increasing prices, they only look at seller's trades. If sellers manage to sell keys at x+1, a new suggestion on backpack.tf is made and key prices increase. Link to comment Share on other sites More sharing options...
Jymotion Posted February 27, 2013 Share Posted February 27, 2013 When people post "proof" of increasing prices, they only look at seller's trades. I disagree, but maybe we're looking at different suggestions. The most important proof to me is how many people are buying above the current low range. Today's tf2 economy is much more similar to a command economy. Backpack.tf has grown so popular that deviating from its posted prices is unthinkable. If that were true, wouldn't the price never change? Isn't selling/buying them for x+1 deviating from the posted price? Link to comment Share on other sites More sharing options...
Puddles Posted February 27, 2013 Author Share Posted February 27, 2013 If that were true, wouldn't the price never change? Isn't selling/buying them for x+1 deviating from the posted price? I think my representation of sellers was a bit off. What I mean by x+1 is the high end of the backpack.tf price range. Naturally, sellers will go for this. Unfortunately, point whores see this as proof that the price needs to be readjusted. The high end of the range turns into the new "average." When sellers see this change, they again opt to price at the high end. Link to comment Share on other sites More sharing options...
Puddles Posted February 27, 2013 Author Share Posted February 27, 2013 Edit: I always accidentally hit "quote" instead of "edit" Link to comment Share on other sites More sharing options...
Jymotion Posted February 27, 2013 Share Posted February 27, 2013 Unfortunately, point whores see this as proof that the price needs to be readjusted. If you want your argument to be taken seriously, I'd suggest leaving backpack.tf reputation points out of it. The high end of the range turns into the new "average." When sellers see this change, they again opt to price at the high end. This may very well be true. But, they sell them successfully. The purpose of this site is to document the price of successful sales and, to me, it's as simple as that. I think any effort by the site to "control the cycle" would go against its purpose. Link to comment Share on other sites More sharing options...
Distinctively Vincent Posted February 27, 2013 Share Posted February 27, 2013 "These suggesters would only look at the sell-side of keys" "When people post "proof" of increasing prices, they only look at seller's trades." Last accepted key price: For 3.66-3.88 http://backpack.tf/vote/id/512a1995ba25363f2100000d "Buyers' trades at 3.66+ http://www.tf2outpost.com/trade/8858905 3.77http://www.tf2outpost.com/trade/8831330 3.77http://www.tf2outpost.com/trade/8809433 3.77http://www.tf2outpost.com/trade/8823663 3.77http://www.tf2outpost.com/trade/8841936 3.77http://www.tf2outpost.com/trade/8852218 3.77http://www.tf2outpost.com/trade/8844080http://www.tf2outpost.com/trade/8857434http://www.tf2outpost.com/trade/8845720http://www.tf2outpost.com/trade/8771648http://www.tf2outpost.com/trade/8855227http://www.tf2outpost.com/trade/8849575http://www.tf2outpost.com/trade/8802151http://www.tf2outpost.com/trade/8611674http://www.tf2outpost.com/trade/8828779http://www.tf2outpost.com/trade/8842587" Previous accepted key suggestion: For 3.66-3.77 http://backpack.tf/vote/id/5121b042ba2536ae3a000001 "Buyers's trades at 3.66http://www.tf2outpost.com/trade/8689678http://www.tf2outpost.com/trade/8658002http://www.tf2outpost.com/trade/8677111http://www.tf2outpost.com/trade/8455259http://www.tf2outpost.com/trade/8654687http://www.tf2outpost.com/trade/8690876http://www.tf2outpost.com/trade/8710139http://www.tf2outpost.com/trade/8596437http://www.tf2outpost.com/trade/8666239http://www.tf2outpost.com/trade/8694869http://www.tf2outpost.com/trade/8650763" Previous key suggestion: For 3.55-3.77 http://backpack.tf/vote/id/511d767fba25366411000001 That one was less organized, but once again, buyer trades. Buyer trades are exceptionally common in key suggestions. Link to comment Share on other sites More sharing options...
☣Long218☢ Posted February 27, 2013 Share Posted February 27, 2013 "These suggesters would only look at the sell-side of keys" "When people post "proof" of increasing prices, they only look at seller's trades." Last accepted key price: For 3.66-3.88 http://backpack.tf/vote/id/512a1995ba25363f2100000d "Buyers' trades at 3.66+ http://www.tf2outpost.com/trade/8858905 3.77http://www.tf2outpost.com/trade/8831330 3.77http://www.tf2outpost.com/trade/8809433 3.77http://www.tf2outpost.com/trade/8823663 3.77http://www.tf2outpost.com/trade/8841936 3.77http://www.tf2outpost.com/trade/8852218 3.77http://www.tf2outpost.com/trade/8844080http://www.tf2outpost.com/trade/8857434http://www.tf2outpost.com/trade/8845720http://www.tf2outpost.com/trade/8771648http://www.tf2outpost.com/trade/8855227http://www.tf2outpost.com/trade/8849575http://www.tf2outpost.com/trade/8802151http://www.tf2outpost.com/trade/8611674http://www.tf2outpost.com/trade/8828779http://www.tf2outpost.com/trade/8842587" Previous accepted key suggestion: For 3.66-3.77 http://backpack.tf/vote/id/5121b042ba2536ae3a000001 "Buyers's trades at 3.66http://www.tf2outpost.com/trade/8689678http://www.tf2outpost.com/trade/8658002http://www.tf2outpost.com/trade/8677111http://www.tf2outpost.com/trade/8455259http://www.tf2outpost.com/trade/8654687http://www.tf2outpost.com/trade/8690876http://www.tf2outpost.com/trade/8710139http://www.tf2outpost.com/trade/8596437http://www.tf2outpost.com/trade/8666239http://www.tf2outpost.com/trade/8694869http://www.tf2outpost.com/trade/8650763" Previous key suggestion: For 3.55-3.77 http://backpack.tf/vote/id/511d767fba25366411000001 That one was less organized, but once again, buyer trades. Buyer trades are exceptionally common in key suggestions. I do both sides to figure low and high end Link to comment Share on other sites More sharing options...
xen Posted February 27, 2013 Share Posted February 27, 2013 So much is wrong with this statement. There are 467,000 keys in circulation. Even at the trader market price of $1.30, it would still cost traders a total of $607,100 USD to buy all of the keys at 3.77. And yes, they will at some point all be "bought up" but will also continue to be sold. The key market is large enough where the top 25 traders don't have that much of an effect on key prices. I really hate posting on these topics, but something needs to be adressed: "~467,000 copies of this item exist", not in circulation. Everyone saying that there are so many more keys in existence is missing a crucial point: The numer of keys in existence is not the number of keys being sold for metal on the market. In fact, I'm willing to wager that the number of people selling keys for metal on the market has dramatically dropped, which is the main reason prices in metal have risen. Fewer sellers & the same or more buyers = price increase. As to the main topic of the thread, limiting suggestions is just not a good idea for any reason; things can change very quickly (Strange vs Strange Festive Huntsman, anyone? Dropped approx. 3-5 keys in a matter of hours, remember?). Putting an artificial limit on current information is never a good idea, doubly so for the most frequently traded item around. Link to comment Share on other sites More sharing options...
AwesomeMcCoolName Posted February 28, 2013 Share Posted February 28, 2013 Well there isn't exactly a shortage of sellers....search OP, page 20 will only be a couple of minutes old (leading to at least 400 Sellers every 3 minutes)... So, theres no shortage of sellers.... Its more the fact that people think keys are going to go up, therefore they're willing to pay whatever the sellers asks. Link to comment Share on other sites More sharing options...
xen Posted February 28, 2013 Share Posted February 28, 2013 Well there isn't exactly a shortage of sellers....search OP, page 20 will only be a couple of minutes old (leading to at least 400 Sellers every 3 minutes)... So, theres no shortage of sellers.... Its more the fact that people think keys are going to go up, therefore they're willing to pay whatever the sellers asks. True, there seems to be a lot of sellers on Outpost selling keys for refined. I still believe that last year, there were a higher percentage of the TF2 trading userbase selling keys for metal, in order to trade for items. This year, there is a smaller percentage of the TF2 trading userbase who are selling keys for metal, in order to trade for more keys (trading for profit). The critical difference being that X% of key traders is less than Y% of casual key sellers, while X is still a lot of users. I remember buying keys last year, from August to about November, and every trade was with a different person. Every person did not have a buying trade whilst they were selling their keys for refined. It was a huge variety of people, some with one key, some with 5, a rare case with 10 or so, but nobody with over a dozen or so. I bought something like 800 or so keys with refined metal during this (waste of) time and don't thnk I traded with the same person twice, either. I would love to hear from people who are buying keys for refined metal these days, whether they can say the same. Link to comment Share on other sites More sharing options...
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