Topic: Explanation of why Bitcoin price is falling. - page 2. (Read 1865 times)

Some of expert report told why the Bitcoin price is falling.
"Bitcoin price is going down because we are starting to use Bitcoin to buy things instead of holding Bitcoin for speculation. I am not invested in Bitcoin financially, but I am invested in Bitcoin intellectually, because I think it will help bringing about a better world. Therefore, I am glad to see that a “real” Bitcoin economy is taking off, where a critical mass of people use Bitcoin as a real currency for real transactions. That will, simply put, change the world.

Remember that there is no such thing as “intrinsic value.” The value of Bitcoin is uniquely determined by the marketplace of buyers and sellers – how many people want to buy, or sell, for how much. Until some time ago, most users wanted to buy and hoard Bitcoin for speculation, in the hope that the price would go up, and also because there wasn’t much that you could do with your coins anyway. That pushed the price up.

The “speculation phase” of the Bitcoin economy has been terribly important because it has put Bitcoin on the map and generated a lot of press coverage. As a result, today we have a critical mass of Bitcoin users, and we see the beginning of the first “real phase” of the Bitcoin economy.

More and more people want – or need – to sell Bitcoin to buy goods, and more and more merchants accept Bitcoin. But remember that, in the vast majority of cases, your coins are converted to fiat currency on-the-fly, because fiat currency is what the merchant wants to receive. That is a sell order that pulls the value of Bitcoin down. If more and more people use their coins to buy things, the result is that the price of Bitcoin goes down.

Now and then there are important and positive announcements, game-changers, which temporarily push the value of Bitcoin up. For example, last week PayPal partnered with three major Bitcoin exchanges. This very important announcement, which clearly shows that Paypal is committing to Bitcoin, pushed the value of Bitcoin up for a few hours… but then it went down again and continued to go down. The good news is that, sometime soon enough, Paypal users anywhere in the world will be able to do their Paypal purchases with Bitcoin. But there is a price to pay: the 150 million (and growing) Paypal users will be able to spend their coins with one click. What is the result? Yeah, right."