Topic: Bitcoin not holding its value? - page 2. (Read 3118 times)

Only a tiny minority of people have savings. The overwhelming majority either have no savings at all or debts that exceed their savings and debts need to be paid in legal tender.

When incomes drop more quickly than debt loads people will need legal tender so they'll sell Bitcoins to get it. Until they give up completely on trying to service their debts and maintain their previous lifestyle, but by this point it's too late and they won't have any currency to buy Bitcoins with anyway.

+1 it's hard to get money into the system

My interpretation: Speculation forms such a giant part of the bitcoin market that a change in people's psychology can radically change the price. There's not enough trade going on to provide resistance to strong fluctuations. This is what caused the huge price increases, and this is what is causing these gradual price decreases.

However, the fundamentals are still sound, so far as I am aware. Bitcoin still is everything it claims to be (a cryptographic currency with a limited supply). Which means I personally would not sell my bitcoins for anywhere near the present prices... I value it much more highly. But I bet a lot of people who buy bitcoins don't understand or don't appreciate the fundamentals. They think the MyBitcoin scandal says something bad about bitcoin itself, even though it says nothing about bitcoin itself. There are really people like this, and they are probably the ones selling their bitcoins. See this thread on reddit: http://www.reddit.com/r/Bitcoin/comments/j7cx9/why_ive_lost_faith_in_bitcoin/

I suppose the fluctuations in the IRL economy may also be causing the price decreases in bitcoins, because as AbelsFire pointed out, people have less disposable income. But all that says is is that people don't understand bitcoin. The fact that the world financial system based on fiat currencies is collapsing is a reason to buy bitcoins, not sell. People should not be using their disposable income to buy bitcoin. They should be using their savings.

It's easier to sell bitcoins cheap than to buy them. If you have bitcoins, you send them to the exchange, wait for confirmation and you can sell them in half an hour. To buy bitcoin you have to wait 3 days at least (in the UK) for your money to clear. People who are worried will sell their bitcoins to the few buyers who have already transferred enough funds. I want to buy at these prices, but I have to wait.

Right now most of the money by individuals is part of their disposable income. When economic conditions deteriorate people generally have less dsposable income so some of the people who have money tied up in bitcoins will be forced to sell them in order to pay rent, buy food, etc. This may or may not be happening right now but until it becomes adopted widely enough that people can pay for the basic necessities of living with Bitcoins it will always be subject to this effect.Value can't be stored in a currency whether that currency is metallic, fiat or electronic. For the most part value is produced as it is needed just before being consumed. Currencies are means of exchange but can emulate the ability to store value under certain limited conditions.

Its anyones guess why bitcoins are going down in price in respect with the dollar, but in my opinion the MyBitcoin.com scandal has been a big hit to the confidence in the Bitcoin project. Thats why bitcoins are going down.

I dont think Bitcoin is a big enough market to be affected very strongly by outside stuff.

Hi All,

The bitcoin markets appear to be mirroring western markets in that the currency value has fallen. The dollar has almost perpetually decreasing value, and bitcoin is following it.

Surely when the dollar is taking a tumble, bitcoins should be worth more dollars than they were before the fall? And if not, how can bitcoin be tooted as a great way of protecting value (like gold, etc.) if it is tied to the dollar?

Grateful for your thoughts,


BB.