Topic: Really, why bitcoin has this value? - page 5. (Read 744 times)

I guess the prices are as such because of the fact that more and more influential figures with multiple million dollars in their name like Elon Musk adopting bitcoin in their investment portfolio. The fact that they dragged a massive following along with them while investing huge amounts of money as well made the price pump like that since last year. I'm pretty sure there are people who would assume such action is grounds for speculation, but I would disagree knowing that a majority of people who invested and held on to their bitcoins are in it because of the use-cases it can bring to the table. This is a very sound explanation from an entrepreneurial perspective. Price pressure and price stabilization does play a role in ensuring that the price floor of bitcoin is kept in check even when it is bearish. Giving people opportunity to buy bitcoins at a much more favorable price point than years ago. I still don't think this solves the question of whether bitcoin is indeed a speculative asset or not, since there are still some parts of the whole thing about bitcoin that is not covered like the fact that it skyrockets when it does, but nonetheless a good explanation.

a lot of investor confidence about the future of bitcoin, where the few people who still use it make investors believe that later when more and more people use it the price will soar. the advantage of bitcoin having high volatility, is to attract new investors to join, and if seen, bitcoin will always form a new ath, and this is what makes many investors optimistic

Maybe bitcoin is an speculative asset but also think that it will not go far that value of $60K from nothing if there are no demands that push bitcoin to what it is now. The economic status also is one factors that affect in bitcoins value especially this pandemic which brought more demands in bitcoin. There are many factors to consider why bitcoin price increased that much but the root is the demand and supply of course, the driving force of bitcoin.

this fact will increasingly stick to the surface over time and over time when they did not understand at first they will now understand more that bitcoin is a speculative asset.
speculation is something that people invented to make this seem predictable where it will go but it seems that speculation will still be speculation whose truth will be 50:50.
but this does not close the very important point that indeed bitcoin is one of the innovative and money-making inventions and we cannot forget it.

try not to think about bitcoin as an entity independent of market forces, at least in so far as price is concerned. ultimately supply (willingness of producers to satisfy) and demand (price consumers willingness to pay) and the equilibrium thereof is what is at play here:

https://ia601600.us.archive.org/19/items/MIT14.01SCF10/MIT14_01SCF10_lec02_300k.mp4

This is really a concern that everyone has, I want to analyze it from pure buy and sell power angle

I have followed the price movement for many years. What I observed is that some kind of price stickiness in it, so it maximum crash 80-90 percent.

I think this is due to combined effects of 2 major driven factor:

1. dramatically reduced selling pressure when the price has gone down so much
(For those who bought the top, it doesn't matter if they sold at 90% loss or 100% loss, they have lost most of their investment anyway, so they end up do nothing and hodl, and this in turn reduce the sell pressure)

2. dramatically increased purchasing power of market buyers
(With same money, you can buy 10x more coins when price has crashed 90%)

That's why when it crashes 90%, the sell pressure will disappear and price will start to stabilise. As a result, if you could drive the price up 100x, even after the crash, you could raise the new bear market bottom to be 10x higher than the old bear market bottom. And that will draw new participants

A big limitation is the fiat money inflow channel, today many banks are restricting it, trying to starve the cryptocurrency market, but with the rise of USDT and other stable coins, it seems the community has find its own way of generating liquidity without fiat money inflow, this is the new development and will raise the price by a few magnitudes if keep going without restriction

How are you defining currency value? Currency value is relative but individually the inflation rates are not necessarily a monolithic which is going to cause currency to lessen in value. Japan's inflationary period was generally isolated many years ago, during the 70's the US had their own inflation problem but post Covid all fiats took a hit because of the jumbled economic response with lockdowns and such.

There is no exact price benchmark for bitcoin, the law of the market is stock and demand that shape the price, currently the community and active bitcoin users continue to increase while the stock is very limited so that the price skyrockets, maybe one day bitcoin will be valued with a definite value such as gold or stocks.

Many factors affect bitcoin value.
i) The Internation economic & political condition. If both show stability its value will rise.
ii) The legal development process of Bitcoin also affects bitcoin its value as the Russian Govt legalizes it. Then there was development in its value.
iii)Some epidemic diseases like Covid-19 also fell an effect on its value.
iv)The purchasing or sale on large scale also rises or falls its value.
v) Some good or bad news also fell effect on its value.
There may be some other causes like Gold price or stock market collapse etc.

Lol you have contradicted yourself if you say one day bitcoins can be worthless because you didn't also give your reason for that allusion you made. But you have to understand that there is a financial digital marketing revolution going on creating an option to domestic currency. This is to say something going on that no body is able to stop it.

Anyone that says to you there is no speculation in any market is lying to you or they do not know what they are talking about, the markets are for speculators, a transaction only happens when both sides speculate, one side believes the price will go down which is why they are selling, the other believes the price will go up which is why they buy, and why the price is going up? Because the demand has increased dramatically during the next months, it is as simple as that.

If, in fact, greed is one of the greatest feelings that the majority have, the bad thing is that it is something negative, it makes many lose and others it makes them lose control of absolutely everything, in order to exploit everything, too, it is like taking every natural resource and plundering it, leaving it useless regardless of damaging it. Controlling greed on the part of others is a very difficult task, it depends on the conscience of each person, what you say is true but very difficult to combat.

Although bitcoin is currently around $63k, but this does not guarantee bitcoin will continue to be worth, this is because bitcoin has a decentralized concept so that the price goes up or down depending on the community, maybe the price will continue to rise because the community is getting bigger but we have to be realistic that one day bitcoins can be worthless.

The bitcoin price doesn't just show the price you will need to pay to buy the bitcoins it will also indicate the interest of people to this market like time after time you will see more people getting into this market and the price goes up in return, not just regarding bitcoin but the price of anything cames from supply and demand and regardless of limited supply since we can see bitcoin world spreading in all over the over it's normal to see such prices for each bitcoin.

In the year 2021, after probably 10 thousand years of humanity, probably more but at least thats what we can go back to, how can people still not understand supply and demand? I mean even 5 thousand years ago, we had supply and demand mechanisms, you give me 20-25 chickens, I give you one cow? Sure numbers could be different, but we are talking about something that DID happen probably 5000 years ago.

And today, people still do not understand how something has a value. It is simple as that, supply and demand, there is a limited amount of bitcoin available in the market, and you get to buy them from the people who are willing to sell, most of the bitcoins in the world are stored in wallets, so only a smaller portion is left to trade, people want to buy it, they just want it, there is a demand, and that makes it valuable and go up in price. How hard is it to understand this?

Honestly, that question could be asked for almost everything. Why do prices of real estate, guitars, consumer electronics, art etc. ballon, drop, rise and fall, and so on. There is much more to economics than just the superficial reasons, supply and demand, social movements, new concepts, and prospects for the future. All of that moves the needle, and is sometimes more volatile than others.

Currencies have value because they can function as a store of value and a unit of exchange. Bitcoin demonstrates some attributes for a currency, but its main source of value lies in its restricted supply and increasing demand. The reason why bitcoin has value is because it is a very good currency for investment. Currencies have value like bitcoin because of the people who are still using it. Bitcoin is a currency but it does not belong to any government or country but, honestly speaking, it belongs to everyone. When everyone wants to use it to trade, speculate, transact or use as a form of collateral for lending/ borrowing, it ends up becoming valuable. Bitcoin became valuable because of the people believes in it, trust this and still using this. In short, Bitcoin has value because people think it does. They believe that it would be similar to gold in the future.

Bitcoin is a speculative asset which makes it a good investment because of its given nature. However, we must remember also remember that there are external factors that determine its movement such as market demand and the movement of the whales in the market. The trend of Bitcoin's price depends on the two aforementioned factors and at the same time, the current season: bearish or bullish. The news about its legality in developed countries play a major role too in the price change.

You see, bitcoin has been able to withstand the test of time and it paved way to give more people another source of income before up until today. Bitcoin rose even more the moment the pandemic hit since digital transactions gradually creeped into our normal routines due to safety precautions. In addition, people looked at it beyond what it is. People took the opportunity to invest and see their money grow over time because they see its volatily as an advantage and something worth risking for.

It is natural that the demand for valuables increases, and this will necessarily lead to a rise in their price, the more people know the value of valuables, the demand will also increase, and this will lead to a rise in the price every time. Bitcoin was originally invented as a means of transferring money from peer to peer and was not invented for speculation but When people began to realize its great importance and value, the demand for it began to increase, and this led to a significant increase in its price.
This can also be likened to gold. Whenever there are major economic problems in any country and the local currency collapses, people tend to buy gold, and this leads to an increase in demand for it and a rise in its price.

I also do not agree if there are people who say bitcoin is not speculative. because bitcoin has always been a speculative asset. do not know for sure to make the price as it is today . it could just go back to 30k or even jump 120k . because this is a speculative asset. and so far the ones who always profit are bitcoin holders and believers.