Topic: For Those Wondering Why The Current Rally - page 3. (Read 10143 times)

So what is your suggestion?

a cup of coffee?

Actually, GDP is a fairly useless number; particularly for attempting to value a bitcoin.

Frank Shostak explains, "The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption."

As Ludwig von Mises wrote, "The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops."

+1

Would 1% global GDP via Bitcoin justify a price of $2,200 per coin? Absolutely.

Could this happen some day? Absolutely.

Will it happen next year, or even the year after that? No way in hell.

Of course, if Bitcoin is utilized even in .001% of global trade, then Bitcoin has won, and will probably conquer the world shortly thereafter.

Just because he says that for the future doesnt mean he wants to buy now at a future predicted price.

I'm buying 50btc on halloween from a guy (cant remember his name) on October 31st, 2012. The deal is set. But I'm not going to give him anything until that day. Just like he isn't going to give me anything until then.

Call it "bitcoin futures" lol  

Edit: the price is at $11 per btc. But only on that day.

One step at a time. If Bitcoin becomes an universal currency at some point, it could truly be worth tens of thousands per bitcoin. We're nowhere close anything like that though. Getting to double digits and staying there is the next step. Getting to triple digits and staying there is another step, probably one of the biggest steps Bitcoin will ever make. Thinking any further than that at this point is pointless.

I seriously doubt $15,000 per bitcoin.

Skype started in 2003 and sold to eBay for $2b and Microsoft for $8.5b. If Bitcoin had an $8.5b market cap in 2016, 7 years after starting just like Skype sold to Microsoft about 8 years after starting, then that would translate into about $540 per bitcoin.

That is probably the most deluded thing I've read around these parts. 1% of world GDP is 700 billion US dollars.

Wow.  If you sincerely believe that's attainable and likely, then I hope you're the one buying lots of bitcoins right now.  Also, I'll sell you all my bitcoins right now for $100/BTC so you can still make an absurd profit.

I can't speak on the black market number because most measurements of the black market are very difficult to verify. However we can measure worldwide GDP and the supply and demand for currencies presently, and can represent them in USD.

If all 21 million Bitcoins were in circulation (which they are not, and over a million may simply be "lost") today, and only 1% of the World's GDP transferred through Bitcoin, the value of a single Bitcoin would be ~$2200/coin. These are using all the most conservative estimates, because we're obviously not at 21 million Bitcoin, and we're probably still a long way from 1% World GDP, but I do think that target is attainable in the next year, and, given the success of Silk Road, could be attainable within one year, we just can't measure it as legitimate world trade.

I just buy some coins every month, regsrdless of the price. It's too much stress worrying abousomething you cannot predict, so that's why I'm slowly dollr cost averaging. I'm getting for the long haul with bitcoin, for all of its stated benefits, not for the price potential (although that would be nice too.)

Speaking on that point, someone told me that if the illegal drug trade moved to btc exclusively, then each coins would be $15000. I didn't check his math or sources thougl but it sounds believable.

(blame my ipad for the typos)

I also think that a lot of you old timers mis-estimate the time and effort it takes for a noobie to bootstrap.  It goes something like this:

1. Read about it, overcome the negative stigma that comes with SR, gambling, etc.
2. Make a small investment using bitinstant
3. Learn a ton about the banking system, chargebacks, how FED creates $.
4. Ask all the noobie questions "why can't someone just [print more bitcoins, steal your wallet, turn off the network, make it illegal]".  What's it backed by anyway? :-)
5. Read enough about it to stress about all the scammers hacked wallets and failed exchanges, etc.
6. Start the KYC process with an exchange that has about 5000 totally obscure and difficult to use ways to deposit money.
7. Tortuously move small chunks of fiat into the exchange
8. start buying
9. freak out about failed exchanges, possibility of USB stick failure, etc
10. start looking at paper/brain wallets
11. Get your head around the idea of actually holding your own money somewhere
12. Create isolated new install VM to make a paper wallet.  You can't outsource this to some client-side web script (if you really want a secure wallet)!
13. TEST the paper wallet concept (requires an entire blockchain sync from scratch).
14. KYC finally comes through!
15. DAMMIT price has doubled :-)

This was my path anyway...

For HNWIs its got to happen with both them AND their advisor (who's gonna do all the work).

So people who might have gotten interested in bitcoin during the Euro financial uncertainty may just now be starting to move from a few hundred BTC trial investment to an actual acquisition strategy.

What I think we broke out of was many people's indifference to owning bitcoins and their fear that it was just a fad that would soon fail.

Most of these people don't have the expertise with cryptography and computer systems to know for themselves just by reading the whitepaper and playing with the coins.

Months of price stability, the lack of a total crash to zero, and a general understanding that you don't keep your bitcoins online if you want to keep them safe are all major contributors to why the same people who left it for dead are now taking another hard look.

Many more are on the sidelines.

The people who think Bitcoin is a hot technology and who want to own a few BTC's for their own personal understanding and trading are far more valuable than the ones who want to flip some BTC, and I expect more people from the first group are now coming out of the woodwork.

It could go on for a long time, but not forever.  As that bastard Keynes said "Markets can remain irrational longer than you can remain solvent.".

So in other words you too think this is not sustainable?

We broke out of the slow and steady uptrend channel.  Now we're in crazy batshit insane uptrend mode.

Breakout suggest breaking out of something. What did we break out of?

There certainly wasn't a present downtrend.

It is a common trading mistake to let price level influence buying and selling decisions. I look at the relative move - if we have a exponential blowoff-top, I'd do something differently than a steady fill-and-grind upward.

Recent price action looks like a breakout scenario to me, with near-term support at 8.60's and and another around 7.80's, which is the defining upward trendline of the channel we were in the last 12 days before it broke out.

Again, if I repeat this analysis at price levels of 10's for support and 12's for recent action, the level really doesn't matter - just the market action.

That served me well - I just needed that much longer to get my money in!

Now $9 is really expensive!  Sell, sell, sell!

I remember when casascius told me when $2.99 was too expensive and told me not to buy.