- Will the price of coins adjust higher to reflect the lower coins per block and this new difficulty
Do think think that bitcoin will hits its peak in the new year and fail or will it wane and then come back stronger?
Buy on the rumor, sell on the news.
If in December the block reward happens and there isn't a spike there could be some aggressive selling if the exchange rate starts to dip below these levels (at 2X the "stable" $5 range).
The metric to watch is how well bitcoin gains traction in its niches where it does well -- as a currency for online gambling, as a decent way for transferring money across borders, and yes -- as a currency used for "investing" in a new way, whether that be GLBSE cyber-equities or in a ponzi-like scheme.
Here's the daily diary for that metric:
- http://blockchain.info/charts/n-transactions-excluding-popular
What that chart doesn't show is what the value of the currency needs to be to support the economic activity for all these niches and other uses of bitcoin.
It is entirely possible that 90% of the value comes from speculation and just 10% is actually needed to support the level of the economy that exists now. So bitcoin's economic value today might be just $1. So even if that economic activity goes up 3X, that brings the value only to $3, still well below today's $10.
The reason there is such speculation though is that if it is plausible that in a year there could be 3X current demand, could it be plausible a year after it would be 30X? Or even later reach 300X (or more) versus current demand? So there is a rational reason to explain fthe price premium each bitcoin carries today.
But nobody knows. It is simply pure speculation. But if you were to project out four months from now how many transactions each day occur and the average "output less change" for each transaction, then you could then make an educated guess about a price range that would likely be in the right ballpark.