Topic: Something's Got to Give - page 3. (Read 3401 times)
Something has given. It is the mainstream resistance to bitcoin.
Fixed the notepad-induced formatting error! 
First of all, I am a huge Bitcoin fan, and while I don't think it will replace the US Dollar, I do think it could replace PayPal, and maybe even credit cards for some purposes. I think it may even become a common sight at the local convenience stores, and be widely used for international money transfers as well.
However, although some members of the Bitcoin community don't seem to want to hear it, there is something wrong with the current market situation. Not only has Bitcoin gone up 1052% since late January, but also 405% in just the past 30 days. That's 13% daily growth. In fact, Bitcoin has doubled in just one week, from a price of $73.50 on March 25th to a high of $147 a few hours ago.
Not only that, but BTC-E, often the exchange of more veteran traders, is still in the upper $90s, such a discretion not only seems unnatural, but may suggest that many more experienced traders are getting nervous.
There are some statistics to support the massive growth, for example, the user-base of Blockchain.info as well as the number of unique addresses have over doubled since January. Furthermore, little could we forget the halving of the block reward, but do these events warrant the triple digit prices we've been seeing? I don't think so.
First of all, a halving of new Bitcoins created does not warrant even a doubling of the price of all Bitcoins ever mined. Even combined with the increase in users, I think $25 or even $50 along with 3-8% monthly growth is sustainable, but what we've got right now is not.
Not only do I think that the current prices can not be sustained, I also think it's hurting Bitcioin as a currency. I've never given much weight to the theory that deflation causes hording and the death of a currency, however, a situation like we've got now does cause some problems. For one, the bulls are hording, who wants to spend a currency that is increasing in value at 405% monthly? The other side of the issue is that the bears don't want to touch Bitcoin. While my business does accept Bitcoin, I am nervous about accepting a currency at $142 that I believe could crash, at least partially, at any time, leaving me to cover the cost of the customer's purchase! Secondly, while I think long term this will be resolved by denominating prices in mBTC, right now we've got an odd situation where a customer has to pay BTC0.0705 to cover a $10 purchase; they aren't used to doing this. Last of all, I'd like to point out that while we in the Bitcoin community understand the root causes of at least some of the growth, to outsiders, this is a bubble, simple as that. I don't think that helps Bitcoin's image.
Long term, I believe this will sort itself out, and this will likely not be the last time we see these prices. I wouldn't be surprised if in one or two years Bitcoin is stable at over $100. In closing, I want to warn that the higher you are, the harder you fall, and remind traders of the 2011 bubble.
However, although some members of the Bitcoin community don't seem to want to hear it, there is something wrong with the current market situation. Not only has Bitcoin gone up 1052% since late January, but also 405% in just the past 30 days. That's 13% daily growth. In fact, Bitcoin has doubled in just one week, from a price of $73.50 on March 25th to a high of $147 a few hours ago.
Not only that, but BTC-E, often the exchange of more veteran traders, is still in the upper $90s, such a discretion not only seems unnatural, but may suggest that many more experienced traders are getting nervous.
There are some statistics to support the massive growth, for example, the user-base of Blockchain.info as well as the number of unique addresses have over doubled since January. Furthermore, little could we forget the halving of the block reward, but do these events warrant the triple digit prices we've been seeing? I don't think so.
First of all, a halving of new Bitcoins created does not warrant even a doubling of the price of all Bitcoins ever mined. Even combined with the increase in users, I think $25 or even $50 along with 3-8% monthly growth is sustainable, but what we've got right now is not.
Not only do I think that the current prices can not be sustained, I also think it's hurting Bitcioin as a currency. I've never given much weight to the theory that deflation causes hording and the death of a currency, however, a situation like we've got now does cause some problems. For one, the bulls are hording, who wants to spend a currency that is increasing in value at 405% monthly? The other side of the issue is that the bears don't want to touch Bitcoin. While my business does accept Bitcoin, I am nervous about accepting a currency at $142 that I believe could crash, at least partially, at any time, leaving me to cover the cost of the customer's purchase! Secondly, while I think long term this will be resolved by denominating prices in mBTC, right now we've got an odd situation where a customer has to pay BTC0.0705 to cover a $10 purchase; they aren't used to doing this. Last of all, I'd like to point out that while we in the Bitcoin community understand the root causes of at least some of the growth, to outsiders, this is a bubble, simple as that. I don't think that helps Bitcoin's image.
Long term, I believe this will sort itself out, and this will likely not be the last time we see these prices. I wouldn't be surprised if in one or two years Bitcoin is stable at over $100. In closing, I want to warn that the higher you are, the harder you fall, and remind traders of the 2011 bubble.
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