Assuming it will recover, do you think it will a slow-paced increase over years or we'll see prices doubling every week?
I strongly feel that the next year will be decisive. Once global economy goes in the second wave of crisis, people will move away from fiat and stocks. Also next year is the halving to 25 BTC per block.
I strongly feel that the next year will be decisive. Once global economy goes in the second wave of crisis, people will move away from fiat and stocks. Also next year is the halving to 25 BTC per block.
Halving of the block reward from 50 to 25 may in fact lower the price of bitcoins, not make them more expensive. Less reward for miners = less return per kilowatt spent on power. I would be glad to return to this quote in a year's time and see whether it's true. I honestly think it is.
A similar argument was once made for the difficulty rating, where some argued a higher difficulty rating justified higher pricing. We've seen that works in the opposite way: a high difficulty yields less BTC per kilowatt of power, causing miners to drop out until difficulty falls in line with the price. The price didn't chase difficulty: miners chased the price and caused difficulty to go higher.
There are only two things that will make bitcoin retrace some of its former highs:
1) Major retailers getting on board and using bitcoins. Not 'mom 'n pop' internet stores selling trinkets, but serious businesses with large turnovers.
2) Another speculative bubble based on potential future uses. This one is unlikely to reoccur. Burst bubbles rarely reinflate using the same arguments or reasons as speculators are naturally very wary.
