All the local people contacting me to buy bitcoins seem to think differently. And this is rural West Virginia, where 98% of people are still stuck 30 years in the past. MtGox isn't that important.
That's even scarier and more consistent with a bubble.
Yeah. When 0.5% of the world is in, the early adopter phase has ended, and there is a mathematical chance of it being a bubble, given that it is a technology which in all likelihood is beneficial to most, such as the Internet, email, mobile phones and Facebook.
In 1999, 0.5% of the world were Internet literate. The "new paradigm" had arrived. There was a huge bubble on valuations of the internet companies, since people were pumping the money in, ahead of the usefulness curve. A mobile operator was trading at $20,000+ per customer. It was delusional, since you cannot extract that much lifetime value out of a customer in perfect competition or even close to perfect competition. To achieve 10% APR, you would have to make $166 per month profit per customer, which you obviously don't, and never will - I am the top absolute heavy user of mobiles, and I hardly pay that much to them in revenue, corporationwide. $10-$20 revenue per month is the norm.
The bubble crashed and the technology stayed, was developed, and has calmly and bloodlessly revolutionized the world.
Bitcoin at $156 per mBTC, as there is 3mBTC per person in the world, actually more like 1mBTC, since many of the coins are yet to be generated (10MBTC), a good number is lost (~0.5MBTC), and I don't think Satoshi will spend his backbone miner position (1MBTC).
Most bitcoin holders that I know, keep, or plan to keep 80% in paper wallets (6.5MBTC out of 8MBTC). Some (1.5MBTC) play with their stash, though, but these generally lose bitcoins over time, and are replaced by others. It is a giant casino, where nearly everyone wins on fiat and loses on bitcoins, (hope thay have fun).
The active traded stock of bitcoins, 3MBTC, is in accordance with the analysis. Half of it belongs to the trading positions of the long-term holders, and they can increase their stash at several pips per hour. Bitcoin price in the last 8 days has risen 50 pips (0.5%) per hour.
The highest "tear speed", which I define as "increase in Bitcoin market cap"/"net investment demand" can be measured at about 10. Expect "bitcoin shortages" to resume, so that there is no meaningful sell side in the exchanges. "Physical"/OTC premium did skyrocket to 25% in early April, it will go back, and higher.
In my short 7 years career as a silver dealer, physical silver was maximum at about +150% compared to spot. Even now it is about 30-50% over.
I am selling Casascius at 1.50 per BTC1, 6 per BTC5, and I am planning to increase the premium. 3 weeks ago I cleared the Casascius supply of the leading Finnish merchant, because of their terms allowed me to buy the casascius' at 3% over melt, and pay with fiat at the close of the second bank day following (T+2). So, I bought like Saturday morning, paid on Tuesday evening, and made 20% in fiat/BTC rate appreciation, instead of losing the same amount by trying to make my money clear in the exchange.
This kind of madness cannot go on for much longer. The ones making money (like I have sporadically done), are making too much of it, and it is pressuring the supply side of bitcoins.
When I was mentioning the "event horizon" yesterday, it is the point of no return, and we are in it right now. NOW bitcoin is the most undervalued during its history, since the wisest brains in the world cannot think of a scenario, that it would not go to $millions in the bubble pop. Therefore they buy in, in the most epic forward escape that the world has seen so far. Since there is still a 100,000% gain available, and the risk has dropped to virtually zero, all the money in the world tries to enter into bitcoins, and the endgame can be rather quick.
Your wallet is safe. If someone understands and accepts what is written above, he can just buy bitcoins and be rich in a few weeks. If he doesn't, he is not interested or capable in stealing your wallet anyway.
I expected blood in the streets and shortages of food when the fiat economy ends. But we did not see either, when Internet, email, and Facebook proliferated. Perhaps I will still be able to buy my weekly bottle of Riesling, and even be able to choose the brand, in relative comfort, despite the fact that I own more money than I ever can realistically dole out.
I can make BTC10 or more, every phone call I take, since people want to buy bitcoins with their fiat, gold, silver, cars and whatever they have, and I can just select what I need.
You can call me if you want, my number is +358-50-3235950. You can talk to me for BTC10 per hour, prepaid. Granted, it is much fiat, but why would you care. You mined your blocks solo, and now you can talk to me 5 hours for the price of one. Realistically, if more than 3 people call me per day, I will need to increase the price due to scarcity of my time available, and the fact that I spend most of my day internet trolling anyway and don't have too much interest in making money anymore
