5 ms·

Why is Bitcoin surging?

8 points by tefo-mohapi 11y ago

Quite curious to find out why Bitcoin is surging (now past $400). What's causing this? How does Bitcoin surge because it is not a stock?

rndmind 11y ago
This is best explained through a visual, https://i.imgur.com/sWRbaUE.gif https://i.imgur.com/sWRbaUE.gif
- debacle 11y ago
  This is one of those gifs that goes in the archive for a rainy day.
- tech_crawl_ 11y ago
  Ha!
tptacek 11y ago
Because people love gambling.
Someone1234 11y ago
It had a height of over $900 in 2014 just for perspective. Last year it was worth over $400, and then it crashed down to just over $200. There's no reason to assume this year's surge won't go the same way. Bitcoin needs sustainable growth, not these crazy spikes caused by people seeing the jump and joining in to "get rich." Who knows what started it? Maybe just a very large single trade. I will say at the current price ($480 ish) you'd be foolish to invest, it is more likely to crash than it is to keep surging (at least looking at historical data). The expression "get in on the ground floor" applies here.
- debacle 11y ago
  Bitcoin will not see anything near "sustainable" until it stops being the victim of speculation.
  - kasey_junk 11y ago
    I'm curious what you mean by "victim of speculation". Speculative market participants smooth price imbalances in most markets.
    - notahacker 11y ago
      They also destabilise markets where the value of the underlying commodity is very hard to gauge and speculators vastly outweigh regular purchasers or hedgers.
  - Udik 11y ago
    Bitcoin structurally can't have any sustainable growth. There's too little of them for a global, potentially huge market. At intervals, it can either languish or explode - that makes it unsuitable either as a reserve of value or as a mean of exchange.
kasey_junk 11y ago
> How does Bitcoin surge because it is not a stock? There are lots of financial instruments that are traded on markets that are not stocks. Things like oil, cattle futures, and currencies are all exceedingly commonly market traded instruments. When people are saying that Bitcoin is "surging" what they are saying is that the price is going up on a variety of markets where Bitcoin can be exchanged for USD. It is comparable to when the Euro goes up in value in comparison to the Dollar. Bitcoin is different than most currencies in that macro-economic factors largely drive the price differences in most headline currency prices. Bitcoin is still such a tiny market that minor fluctuations in a small set of speculative market participants can cause large price swings.
notahacker 11y ago
This was discussed here https://news.ycombinator.com/item?id=10505362 https://news.ycombinator.com/item?id=10505362 Top theory was that the world's most infamous Ponzi scheme architect is heavily promoting a BTC-based pyramid scheme based around "community" and "sharing" in multiple new markets, including China. Other theories include market manipulation by the Winkelvosses, and mainstream coverage of non-BTC "blockchain tech" being used by major financial institutions. All of these effects may be pretty minor, but once BTC starts to surge it doesn't take much to get the speculators going
dontdraper 11y ago
It is going down now
nyddle 11y ago
"The price of the cryptocurrency bitcoin surged on Wednesday to its highest in more than a year amid a wave of Chinese testimonials for a “social financial network” called MMM, which bears the hallmarks of a pyramid scheme." http://www.ft.com/intl/cms/s/2/ee93bc2e-82f6-11e5-8095-ed1a37d1e096.html#axzz3qdmgG3Td http://www.ft.com/intl/cms/s/2/ee93bc2e-82f6-11e5-8095-ed1a3...
sidcool 11y ago
A more important question...Is bitcoin a pyramid scheme?

8 points by tefo-mohapi 11y ago

Quite curious to find out why Bitcoin is surging (now past $400). What's causing this? How does Bitcoin surge because it is not a stock?

rndmind 11y ago

This is best explained through a visual, https://i.imgur.com/sWRbaUE.gif https://i.imgur.com/sWRbaUE.gif

debacle 11y ago
This is one of those gifs that goes in the archive for a rainy day.
tech_crawl_ 11y ago
Ha!

tptacek 11y ago

Because people love gambling.

Someone1234 11y ago

It had a height of over $900 in 2014 just for perspective. Last year it was worth over $400, and then it crashed down to just over $200. There's no reason to assume this year's surge won't go the same way. Bitcoin needs sustainable growth, not these crazy spikes caused by people seeing the jump and joining in to "get rich." Who knows what started it? Maybe just a very large single trade. I will say at the current price ($480 ish) you'd be foolish to invest, it is more likely to crash than it is to keep surging (at least looking at historical data). The expression "get in on the ground floor" applies here.

debacle 11y ago
Bitcoin will not see anything near "sustainable" until it stops being the victim of speculation.
- kasey_junk 11y ago
  I'm curious what you mean by "victim of speculation". Speculative market participants smooth price imbalances in most markets.
  - notahacker 11y ago
    They also destabilise markets where the value of the underlying commodity is very hard to gauge and speculators vastly outweigh regular purchasers or hedgers.
- Udik 11y ago
  Bitcoin structurally can't have any sustainable growth. There's too little of them for a global, potentially huge market. At intervals, it can either languish or explode - that makes it unsuitable either as a reserve of value or as a mean of exchange.

kasey_junk 11y ago

> How does Bitcoin surge because it is not a stock? There are lots of financial instruments that are traded on markets that are not stocks. Things like oil, cattle futures, and currencies are all exceedingly commonly market traded instruments. When people are saying that Bitcoin is "surging" what they are saying is that the price is going up on a variety of markets where Bitcoin can be exchanged for USD. It is comparable to when the Euro goes up in value in comparison to the Dollar. Bitcoin is different than most currencies in that macro-economic factors largely drive the price differences in most headline currency prices. Bitcoin is still such a tiny market that minor fluctuations in a small set of speculative market participants can cause large price swings.

notahacker 11y ago

This was discussed here https://news.ycombinator.com/item?id=10505362 https://news.ycombinator.com/item?id=10505362 Top theory was that the world's most infamous Ponzi scheme architect is heavily promoting a BTC-based pyramid scheme based around "community" and "sharing" in multiple new markets, including China. Other theories include market manipulation by the Winkelvosses, and mainstream coverage of non-BTC "blockchain tech" being used by major financial institutions. All of these effects may be pretty minor, but once BTC starts to surge it doesn't take much to get the speculators going

dontdraper 11y ago

It is going down now

nyddle 11y ago

"The price of the cryptocurrency bitcoin surged on Wednesday to its highest in more than a year amid a wave of Chinese testimonials for a “social financial network” called MMM, which bears the hallmarks of a pyramid scheme." http://www.ft.com/intl/cms/s/2/ee93bc2e-82f6-11e5-8095-ed1a37d1e096.html#axzz3qdmgG3Td http://www.ft.com/intl/cms/s/2/ee93bc2e-82f6-11e5-8095-ed1a3...

sidcool 11y ago

A more important question...Is bitcoin a pyramid scheme?