This look eerily familiar to the NASDAQ in February/March of 2000. Plus there's no recent financial news to justify such a huge jump in value in such a short time.
This bubble will burst. It will burst soon and it will burn the people who just jumped in and bought the new mining-specific machines that recently came on the market.
"In the short term the market is a popularity contest; in the long term it is a weighing machine." - Buffett
If you'd like to hold BTC for 10-20 years, they may be quite cheap at the moment, as most of them have already been made. If you're looking for returns/stability/growth over the next six months, look out.
As a medium of exchange, the BTC is presently sub-par; it's just too volatile. I can't be certain that, if I exchange USD for BTC in a wallet on my phone, that it will be worth within 1% of what I paid by the time I walk to a store to spend it.
"If you'd like to hold BTC for 10-20 years, they may be quite cheap at the moment, as most of them have already been made."
That fact that most have already been computed has little bearing on the future price of BTC. What matters in the future is whether or not people will actually use Bitcoin as a currency (it has no other use); I am still not convinced that it will ever become mainstream. I hear about all sorts of places that accept Bitcoin payments, but I have yet to see anything that matters -- I cannot buy diesel with it, I cannot pay rent with it, I cannot pay utility bills with it, my local supermarket does not take it, and I cannot pay taxes with it. Even for black market transactions (drugs, guns, etc.) Bitcoin is obscure; even with all the sales that happen on Silk Road, you are looking at a tiny fraction of the market for illegal drugs.
Bitcoin is in a very precarious position. Most of the cost of buying in is the result of speculation about its future use, which is fueled by the media coverage it receives on tech news sites. A lot of the hype is based on questionable assumptions about Bitcoin's security and about the lack of authorities in the system. Bitcoin's ability to survive when the hype dies down and the assumptions are challenged is doubtful, at least from where I sit.
The day the assumptions get challenged, especially when the Man steps in, is the critical one.
Something like BTC, however, just seems convenient. In a thread yesterday, I needed to express the price of tools in a country-independent way. For giggles, I expressed it in BTC instead of USD; afterward, it felt right. A country-invariant store of value has real value on its own. It might not be BTC, but I don't think cryptocurrency is going away.
It may have felt right, but by tomorrow it will be inaccurate, since BTC/USD will have continued to shoot up.
There really is no country-independent way yo express price, even those with the same currency have different prices for the same basket of goods based on a myriad of conditions. That's what Happy Meals don't cost the same everywhere.
BTC has only just begun to experience volatility. The natural price is somewhere between $10^7 and $10^-7 (I'd pay $1 to own all the BTC, just for kicks). The future will sort it out.
For as long as coins are still being made, there's direct connection to reality. Someone, somewhere, will have a few integral BTC, and they'll probably want to exchange them for something else of value. After the coins run out, I can't figure out what happens; it might be bad.
They are made at a constant predetermined rate. They are only harder to make because more people are trying to make them. The way bitcoins work is that the difficulty of the proof scales with the CPU power.
If half the computers currently mining decided to move on to do something else tomorrow, bitcoins would continue to be made at the exact same rate.
Buyers keep entering the market. Mt. Gox is so inefficient at "approving" new users that it may actually be slowing down the crazy growth. Last I heard, there were over 9,000 people waiting to be approved on Mt. Gox.
Why in gods name would anyone want to use MtGox? Their verification requirements are ridiculous (they dont accept watermarked passport scan), why in gods name would anyone upload good document scans to what is essentially the money laundering arm of the Japanese Yakuza!
Aint the whole point of bitcoin is that one doesnt have to use centralised systems like Paypal who love to freeze your accounts, MtGox do the same now, they freeze an account until you "verify" which might take months if ever all while your bitcoins are sitting in their account
This is a serious problem, its got to have implications in game-theory.
It's better for 'ME' to join a tried and tested exchange.
-but-
It's better for bitcoins as a whole, for me to try one of the newer or lesser used exchanges.
Just why entry level jobs require such high requirements now a days - as a hiring manger, why take the risk on someone knew (even if someone took the risk on you during your youth in better times) - better to just hire someone with 3 years experience...if its a buyers market and supply outstrips demand.
Well then you are lucky, in meantime I will use bitstamp who dont fuck around freezing your bitcoins and dont ask for documents unless you are adding/withdrawing thousands.
I have some bitcoin that I've been sitting on for 2 years which I'd like to liquidate, but the spotty track record of bitcoin exchanges makes me wary of providing the kind of identifying/financial information that seems to be required.
Only up to the point where they need to pay rent, buy food, pay taxes, or otherwise live their lives in the real world. When those things happen, those hypothetical developers will go running to a Bitcoin exchange to get their nation's currency (and they'll be pretty unhappy if there is a sudden, unexpected fluctuation in the price of Bitcoin).
You can say whatever you want about this bubble, but a couple of days ago it was around 100 $ who bought it 2 days ago now have earned the 50%... In 2 days... It is just crazy.
I can remember the HN post of "BitCoin just hit 10$" and I remember to say to my brother... Whooa that stuff really worth something, we should start mining it...
Plus if there is more than 9000 people waiting to buy more than 50.000 dollars of bitcoin, the price is gonna raise again... I might buy some...
I can imagine it's investor-minded people who are just trying to ride the wave. We'll know what the floor is at some point over and over again, which would be the only time to buy - unless society starts to distrust it - which might be good at least for keeping the investment-profit schemed people out.
So many people are waiting for a crash so they can buy in. The floor is much higher - if it does crash, i'd say either the historical $30 mark. Or somewhere 50+ like $70
At $20 I feel there would be so much renewed demand from such a low price it would never stay there, almost an immediate rebound.
There seems a Sunday-Tuesday surge in prices, perhaps as people who learned they wanted some over the weekend in Asia-Europe-Americas get their funds in and make their purchases. So Tuesday may be a better time - I have a hunch it'll break $200 by then.
Still, as suggested in my downvoted reply to the above 'sell at $50' comment, $500 would be a better time for some profit-taking.
it's $172 on mtgox, went up another $20 today. This is not a natural movement. This thing is a bubble that can pop any point, but at the same time, I won't be surprised if it goes to $1000 first. Like the .com bubble, you just hope that you can cash out before it crashes.
Heh. I have tried to buy BTC for the past two days, but nobody was interested in selling at the last lowest ask price. On the Canadian exchange, it seems as if some people are controlling the market by buying and selling to themselves.
I understand that the ask prices are going up in part because of increased demand, but the constant ratcheting up of asks smells fishy.
This bubble will burst. It will burst soon and it will burn the people who just jumped in and bought the new mining-specific machines that recently came on the market.