Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 32404. (Read 26609741 times)

exactly, dump some fractional reserve bitcoins on the exchange and suppress the price. oh, Gox! 

The spread between Gox and Bitstamp is the smallest its been in a while, percentage-wise. Its only around 5%. this either means that Gox isn't high enough & will go higher in the future, Bitstamp is too high, or perhaps the arbitrage channels are opening up again.

Mini correction incoming?

for some of the same reasons some people are hoarding btc now.

knowing that mindset i believe the current run up that is happening now is not a sudden shift in detection of an unexpected increase in sustainable future value growth rates.

Seconded.

Why?

i actually do own  some coins

edit: and i do keep some of them under my mattress...

Inflation adjusted interest rates are veering negative in unbacked currencies that may also default.  The question of the revaluation of discounted future value seems that it is being answered by the market in the moment.

Oh...And tulips are pretty too.  

I take it you're not a gold bug?

Bitcoin does have utility, and it is filling a serious gap in a world that is looking for alternative ways to store wealth in an increasingly unstable financial world. I live in a city that is currently experiencing a condo boom/bubble that is largely the result of asian money looking for a way to hedge their holdings. Bitcoin is starting filling this niche. In the future, Bitcoin's utility as a transactional medium will be realized with increased market penetration and a mature ecosystem of services.

an investment produces something, it has utility.  investing in a worker and a taco truck, produces a return.  buying something and hiding it produces nothing.

the present value should already contain all discounted future value, which is anticipated by market participants.  although one could make an argument that market participants are growing temporarily driving up the price.

so then we may have what is called a liquidity trap in the bitcoin world.  which would result in deflation (higher btc price)that we are now seeing but it is not a long term innovation value driven bubble by a change in the rate of adoption and rate of tx growth.  

IF that is the case, then as soon as the speculators run out of powder and whatever other reasons others may have for hoarding the crash will come , unless tx rates increase dramatically.  it could happen, i just don't see it right now.

this is not to say that the price cannot go up, it may for some time, until people realize that there is no additional value from just buying the stuff and not doing anything with it.

You and Rick Falkvinge of the pirate party.
http://www.reddit.com/r/IAmA/comments/1owf4v/im_rick_falkvinge_founder_of_the_first_pirate/ccwbao9

Buy and hold! Is hard to beat.

Don't be sad.  If you brought the story correctly, they 'll probably buy in a year earlier than they would have without your advice.  It takes some getting used to the idea.

I have been telling people about Bitcoin for more than 2 years, making them "aware" of it while trying not to push it hard, and recommending the, "not more than you can afford to lose" approach. I have always believed that Bitcoin is just too important to ignore, and has too much potential to not invest SOMETHING in it, even it it is a very small amount. Investing $100 at any point during late-2011 and 2012 would have yielded between about a $1500-$10000 return as of today. That's crazy! All in all, I'm sure that I have told no less than 40 people about it and not one person has bought in. It actually makes me kind of sad.

You're absolutely right. The two drive each other, and merchant adoption is the final fallback for the price, at least theoretically.

The problem comes when people look at the price and say it's not justified by merchant adoption or transaction volume. Store of value and medium of exchange (SoV and MoE) are the two giant dynamos driving Bitcoin adoption, but while MoE is the ultimate theoretical grounding for the price, SoV is what the vast part of the actual price level is determined by. I think it's like 95% or 98% store of value, the rest being MoE. That may be one reason the SR shutdown barely affected the price even though it supposedly had a million users (inflated of course, but had to be at least 100,000 or more, and a lot of money was being moved).

So I think the biggest near-term drivers will actually be things like IMF haircuts and capital controls more than new merchants. The major commercial adoption will come later.

As that post on reddit put it, "The [investors] that invest based on a sound assessment of Bitcoin's future potential serve as a proxy for actual present commercial adoption by boosting the price in the present to a degree commensurate with how likely commercial adoption will be to take hold in the future. To misunderstand this is to misunderstand investing itself, as well as to misconstrue much of what is happening in the Bitcoin world."

I think merchant adoption is an important prerequisite to the "store of value" function though.  It gives bitcoin the initial legitimacy it needs to survive.  Once confidence is built that you will be able to utilize your bitcoins in a meaningful way, then it makes sense to save in bitcoins.

I think the reason store-of-value as a price driver isn't talked about more is because it's sort of taboo. To those who are less familiar with Bitcoin and its potential, it makes Bitcoin sound like a ponzi scheme the more store-of-value functionality is emphasized. So there's a taboo on pushing that angle. Of course there's always a taboo on saying, "Buy this thing (which I, uh, also just happen to own) because it's going to go up massively in price!" Nevermind that that's about the best, most generous, most helpful advice you could have given anyone at almost any time in the past four years; it's just not socially OK to do.

People also naturally tend to speculate, whereas merchant adoption doesn't come without proactive efforts, at least in these early days. So there's all around a large bias toward hush-hush on the store-of-value aspects. The problem is that people then get confused about the investment aspects and what's driving the price. But socially, that's not considered something you have any obligation to help people with, and people often aren't very grateful even when you do help them and even when you can prove they would have been wealthy by now if they had just followed your advice. The human mind just doesn't work that way.

it's just the ultimate financial instrument and everyone will start realizing it in the next years

i would have to go with this and add that...

some never reported their btc income a couple years ago when they mined it or were paid for services  (maybe didnt know what to do with it and it was monopoly money at the time) and don't want their btc showing up at places that have instituted KYC...  you know what happens to money assets that you hide from the US govt after 3 years right... not saying it is right but that's the way it is...

Haven't actually thought about this but I think it must be pretty spot on. A lot of early adopters (miners) sold their coin during the early days and a lot of criminals kept accumulating wealth and not spend it on themselves, but resupply, etc.. Now due to the crackdown on SR they aren't moving a finger.

Wouldn't be surprised if now a lot of the btc that used to be for sale (by criminals) are off the market for a while.