Well the two major points that drove the price were Chinese adoption and US senate 'acceptance' was it not? What led to these two things happening though is very interesting:
China had banned a very popular form of digital currency just several years back (QQ coin), and now they are all of a sudden 'cool' with Bitcoin? Bitcoin allows Chinese citizens to break all sorts of laws, some serious like moving money abroad. I can only imagine why they have changed their stance on the matter.
I suspect it might have something to do with trying to derail the dollar. China is in the process of moving away from the USD and trying to establish the Yuan as THE reserve currency to take its place. Of course they are happy with things like Bitcoin undermining the US Dollar's power. The U.S then had to follow suit and 'accept' Bitcoin or they would have made themselves look pretty bad in the process. China have a tendency to try to soak up all the world's resources and Bitcoin could just be their latest fad. I really don't know, but lets hope for Bitcoins sake they dont lose interest.
Topic: What is driving the price of Bitcoin (Read 1181 times)
4. People trying it out, that is buying for no reason other than being a part of it.
MtGox being a USD black hole creates a situation where no one wants to sell their bitcoins there, because, why would you do that? No way to pull out dollars. This creates a huge BTC shortage on Gox, and more fuel for this bubble.
At this point, Mtgox is at $1200, and Btce is at $940. Market thinks goxbux are worth 75% of real dollars.
At this point, Mtgox is at $1200, and Btce is at $940. Market thinks goxbux are worth 75% of real dollars.
Um, btc-e has not been accepting bank deposits for about a week now, so btc-e bucks are overvalued. I'd be careful putting too much weight on that exchange's price, just like you should be careful with MtGox.
Due to the problems with mining hardware deliveries, mining market is currently not very efficient.
This creates a situation where the real cost of the whole Bitcoin network is not felt on the exchanges, and is not holding the price of BTC in check. More fuel for the bubble engine.
This creates a situation where the real cost of the whole Bitcoin network is not felt on the exchanges, and is not holding the price of BTC in check. More fuel for the bubble engine.
MtGox being a USD black hole creates a situation where no one wants to sell their bitcoins there, because, why would you do that? No way to pull out dollars. This creates a huge BTC shortage on Gox, and more fuel for this bubble.
At this point, Mtgox is at $1200, and Btce is at $940. Market thinks goxbux are worth 75% of real dollars.
At this point, Mtgox is at $1200, and Btce is at $940. Market thinks goxbux are worth 75% of real dollars.
According to theory the value of Bitcoin is driven by supply and demand.
When one looks at the exchange rate of Bitcoin over the last little while it would appear that there is a shortage.
With this being said, what is causing the current shortage?:
1. People actually using it to buy and sell stuff so quickly that it appears as a shortage (velocity of money)
2. People holding on to Bitcoin as a hedge against Fiat currencies.
3. People strategically buying and selling Bitcoin hoping to make a ROI (speculation)
I am currently engaging in #2 and engaging in #1 is simply an eventuality however I am wondering about peoples thoughts on #3.
When one looks at the exchange rate of Bitcoin over the last little while it would appear that there is a shortage.
With this being said, what is causing the current shortage?:
1. People actually using it to buy and sell stuff so quickly that it appears as a shortage (velocity of money)
2. People holding on to Bitcoin as a hedge against Fiat currencies.
3. People strategically buying and selling Bitcoin hoping to make a ROI (speculation)
I am currently engaging in #2 and engaging in #1 is simply an eventuality however I am wondering about peoples thoughts on #3.
You seem to be assuming demand is constant and only looking at supply.
IMO, demand has shifted quite a bit the past few months.
MtGox does not allow USD withdrawals. This creates situation where you have to buy Bitcoins to cash out of MtGox. This increases the price and attracts new investors. New money further increases price. This feedback loop is what causes almost all bubbles.
According to theory the value of Bitcoin is driven by supply and demand.
When one looks at the exchange rate of Bitcoin over the last little while it would appear that there is a shortage.
With this being said, what is causing the current shortage?:
1. People actually using it to buy and sell stuff so quickly that it appears as a shortage (velocity of money)
2. People holding on to Bitcoin as a hedge against Fiat currencies.
3. People strategically buying and selling Bitcoin hoping to make a ROI (speculation)
I am currently engaging in #2 and engaging in #1 is simply an eventuality however I am wondering about peoples thoughts on #3.
When one looks at the exchange rate of Bitcoin over the last little while it would appear that there is a shortage.
With this being said, what is causing the current shortage?:
1. People actually using it to buy and sell stuff so quickly that it appears as a shortage (velocity of money)
2. People holding on to Bitcoin as a hedge against Fiat currencies.
3. People strategically buying and selling Bitcoin hoping to make a ROI (speculation)
I am currently engaging in #2 and engaging in #1 is simply an eventuality however I am wondering about peoples thoughts on #3.
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