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Bitcoin hits $200

77 points by infinitivium 13y ago

shanelja 13y ago
Wasn't it like $130 a few days ago? This kind of inflation is really cool for the people invested in bitcoins but this is the point where I would panic sell, but perhaps I'm a coward. EDIT: Link's down, it was $203 at 12.06 GMT.
- andyhmltn 13y ago
  Yes and a few days before that it was $100. I was watching it out of curiosity yesterday and it went up about $20-$30 I believe just while I was at work. Hopefully it crashes, stables out and then gains use as a currency rather than an investment.
  - rplnt 13y ago
    It will never do that due to its design. edit: unless the market is controlled by someone willing to lose money to keep it stable.. so no, it won't happen.
  - smosher 13y ago
    > Hopefully it crashes, stables out and then gains use as a currency rather than an investment. That's impossible. The only low stable price is $0 which is useless as a currency. Only when its user base is no longer growing and there is enough value to satisfy the entire user base will it stabilize. My expectation is that unless it dies entirely it will continue to grow until it has more or less total global coverage. With the limited supply of BTC, it has to be worth much more than $200 apiece. A crash just causes problems but if you want to use it as a currency I think what you really want to move the decimal, which is purely a representation issue: it's ~$2/centiBTC.
- ewoodrich 13y ago
  Well, it's deflation in a broader economic/purchasing power sense. http://en.wikipedia.org/wiki/Deflation http://en.wikipedia.org/wiki/Deflation "deflation is a decrease in the general price level of goods and services" Prices of real goods are rapidly decreasing for Bitcoin, but you are correcting that the exchange rate is ballooning or "inflating" in that sense.
- deelowe 13y ago
  The word you're looking for is "deflation." Inflation is when currency becomes less valuable.
oleganza 13y ago
It still has just $2 bln "market cap". If it was a payment processing company, you would call it a slow democratic IPO, not a bubble about to burst.
- aneth4 13y ago
  Market capitalization of a company and the bitcoin money supply are not even remotely similar.
mikecane 13y ago
Is it safe for me to express my belief that Bitcoin value is being manipulated by forces who intend to crash it? I've stayed away from it simply because of that. I fear some people are in for a very rude awakening. Don't count your money just yet -- and, for god's sake, don't try to use it as the basis for any paper money loans! None of you knew about Stuxnet. The story of Bitcoin's infiltration and manipulation is years away from being revealed.
- yuvadam 13y ago
  Really? Should we talk about $$$ manipulation? We all know about the world finance industry. We all know how corrupt it is and how fucked-up things really are. Yet discounting Occupy - which was violently suppressed anyhow - I don't see people in on the streets demanding to burn down Wall Street to ashes.
  - mikecane 13y ago
    >>>Really? Should we talk about $$$ manipulation? This is the same thing by the same people is my suspicion.
- Hermel 13y ago
  Who do you have in mind? I don't see anyone who wants Bitcoin to crash desperately enough to spend millions on inflating a bubble and then pop it - which is a very risky and costly plan. More likley would be a scenario in which someone who holds a lot of Bitcoins pushes MtGox prices upwards in order to be able to sell OTC at inflated prices. However, given that Bitcoin on MtGox has a volume of USD 20 million daily, this takes a lot of resources. It is much easier to manipulate a low-volume stock on the stock market.
  - davidw 13y ago
    Fun fact of the day: in Italy, this idea of "but who's REALLY behind it" is called "dietrologia", or, very literally translated, "behindology". My theory: it's the Mayflowers.
  - 13y ago
DanBlake 13y ago
The problem with bitcoin is 1 or 2 events that give the public a 'scare' have the potential to nearly floor the usd value. All it takes is one headline on CNN like "Joe Blow selling Anthrax and Cyanide on Silkroad/Craigslist for Bitcoins" for the general public go to fucking apeshit and cause some real 3 letter organizations to shutter most bitcoin exchanges with secret subpoenas and such. Realistically, there is so much dependency on mtgox, once it went down I believe the price of bitcoins would likely be 10x less than it is currently.
- oleganza 13y ago
  Almost everyone new to Bitcoin already has heard every scare story about drugs, money laundering, tax evasion, viruses, hackers, conspiracy etc. The news about DDoS or stolen money will not be a huge surprise (unless ALL money is stolen at once :-)
  - DanBlake 13y ago
    What I am suggesting is a league above the things you mention. The US generally does not fuck around when it comes to those sorts of things and has much broader power to do crazy shit (seize domains, secret subpoenas, etc..) when it involves national security vs generic anti-drug and weapon agenda.
    - ewoodrich 13y ago
      Drugs dealers typically use a large amount of cash, but that hasn't produced a pervasive stigma about physical currency in the US. So I don't think users will necessarily be dissuaded by reports of criminal use.
- Hermel 13y ago
  People who are that easily scared normally don't have Bitcoins to sell.
- aneth4 13y ago
  Nobody who owns bitcoin gives a damn who buys what with it, any more than you care who buys what with your country's currency. It's currency. What could threaten bitcoin is a major flaw in its algorithm, which seems unlikely in the near future, and the hacking of the primary exchange - MTGox. In fact, I keep my Bitcoin at MTGox with the knowledge that if they lose my Bitcoin, the value will plumet to nearly nothing regardless of whether my coins are there or not.
graeham 13y ago
Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't have an exchange-based economic system without some expected stability in the value of the exchange. [1] - http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania
- oleganza 13y ago
  If everyone's intention is just to buy low and sell high, then it's a tulip mania. But if there are people who would be satisfied with a stable price, or price above their investment amount, or ability to buy stuff for it, then it is not just a tulip mania. Bitcoin price was pretty stable during 2012. Some people used it as a "store of wealth". Now, you still can use it for the same purpose, but you have to bid up the price a little to take a piece of it.
- Hermel 13y ago
  A better comparison than tulips would be silver. Tulips are a bad store of wealth (they rot, anyone can grow them, are not divisible, etc), whereas Bitcoin and silver can be stored and easily divided into smaller units. It still could be in a bubble, like silver was around 1980. http://silverprice.org/charts/history/silver_all_data_o_usd.png http://silverprice.org/charts/history/silver_all_data_o_usd....
  - jbester 13y ago
    Not sure I buy either of the metaphors. Silver has industrial, scientific, and commercial (i.e., jewelry) applications that create demand and use the commodity. Bitcoin, on the other hand, does not. It's just used as a transitional currency.
    - rikf 13y ago
      It does have certain mathematical properties that make it rare. or at least harder and harder to produce as times goes on that leads to scarcity. And as we all know price = demand / supply
mrjava 13y ago
I can't believe this is catching up
duiker101 13y ago
Can we expect an exceptional fall soon?
- Yuioup 13y ago
  At some point people are gonna wanna cash in ...
deleted 13y ago
[deleted]
bobsy 13y ago
What goes up... The past couple of weeks has shown how easily the bitcoin market can be manipulated. People used to do this with shares. Buy up all the shares to push the price up. Then get out with a profit crashing the value of the share. I don't think this is any different. I wouldn't be surprised if a handful of parties were responsible for the explosion in bitcoin value. You could point to the Cyprus banking crisis perhaps as a reason for an increase in value but realistically Bitcoin is just one major hack away from being worthless again... Its like keeping your gold on a wooden shelf above a lava pit.. why anyone would put long term savings into Bitcoin right now is beyond me.
- brianbreslin 13y ago
  If they can get liquidity then you are talking hundreds of millions in profit
- Cieplak 13y ago
  Are you saying that someone has cornered the bitcoin market?
- xhrpost 13y ago
  The "price" is whatever the last trade went for. If there are market manipulators buying up "all the shares", it would seem like a big risk as they are relying on there being enough bids within their profit range to sell them back at a profit. Right now for example, you could sell 100 BTC on Mt.Gox for an average price of $203USD/BTC. Try to sell 10,000 BTC and the average drops to about $195, and 100,000BTC would only average $111.
ewoodrich 13y ago
I'm not a substantial bitcoin investor, but I follow bitcointalk.org fairly actively, and there has been a fairly noticeable increase in posts about ASIC (Application Specific Integrated Circuit) solutions being a profitible means to mine Bitcoins. I don't know whether this is a driving factor, but it certainly relates to the expanding market in general. The wide perception of Butterfly Lab's ASIC solution as being a scam has resulted in wide interest in alternatives, which are legitimized by seemingly functional and deliverable ASIC solutions by companies like Avalon. At over 6,000 Mh/S per module, they exceed the best GPU/FPGA solutions for mining almost by a almost a hundred fold (after factoring power consumption), which has produced a tangible market of bitcoin hardware. Regardless of whether specialized Bitcoin ASIC hardware is cost effective, the production serves to legitimize the currency/producing market as a whole (as well as reinforcing the hype/gold rush mentality for miners and speculators). I'm still not sure how/whether the currency will eventually settle, but it is very interesting to follow.
- chii 13y ago
  having specialized hardware that is a commodity to mine, and later, when mining is no longer profitable, to verify transactions, is a good thing! I m quite glad that it is being looked into.
AndrewDucker 13y ago
It's fascinating to watch this, largely because Bitcoin has no "natural" value. The only utility it has is as a transfer of value from one place to another, and it can do that equally well with a bitcoin being worth $1 or $200. But it's really interesting to watch the value ratchet up, and easy to see how you can do this - if people will only ever sell a bitcoin for (say) 1% more than they bought it for, and people buying things with bitcoins don't care if the things they're buying with it are priced 1% higher than they might, theoretically have been, then the price of bitcoins can keep increasing indefinitely. Until, that is, some people decide that they want to get rid of a lot of bitcoins, and thus are willing to accept less than that, to shift them quickly. Then the price drops. And then more people might also decide to sell, so as to convert the bitcoins they have at the value they're now worth. It's classic sentiment pricing - but without any of the value "stickiness" that you get when there's some utility to be gained from the objects you're trading. (I'm not trying to talk Bitcoin down here, I find the whole thing fascinating. Just thinking out loud.)
- lvh 13y ago
  I'm not sure if it can do so equally well at $1 than at $200, particularly when trying to transfer non-trivial amounts of value, due to Bitcoin's (formerly) quite limited liquidity. I'm not sure I would have been able to purchase 100k worth of Bitcoin easily, and what would've happened to the price if I had attempted that. If I had been able to, perhaps it would've worked out in my favor.
  - AndrewDucker 13y ago
    True, if you're wanting to transfer £100,000 then you're out of luck unless there's an awful lot of liquidity. But then people don't seem to be making transfers that large, last I checked.
- tomp 13y ago
  The alternative possibility is: the amount of bitcoins kept for trade significantly outweighs the amount of bitcoins kept as an investment. Then, the price (in $) would roughly equal to the ratio of the amount of money circulating in the society over some period of time (in $) the number of available bitcoins. Thus, bitcoin would probably be worth somewhere between $100,000 and $1,000,000.
ck2 13y ago
So how much was that first pizza worth now?
- ewoodrich 13y ago
  At the original price of 10,000 Bitcoins, it would be presently worth 1,880,000 USD.
  - samholmes 13y ago
    Looks like I should be selling pizza
- Fuzzwah 13y ago
  There's a real time ticker you can watch it on: http://www.ounce.me/ http://www.ounce.me/ Currently: Bitcoin Pizza Index = $2,091,789.81
madaxe 13y ago
The funny thing is that it didn't hit $203, or $201.12, but $200. Whoever is driving this big buys to drive up the price is doing it at very predictable, very specific price points, across multiple currencies. On mtgox GBP, for instance, it plateaus and peaks at very predictable values - £125, £130. Frankly, I think that what's going on is there are a few traders (actual traders, not BTC speculators) who are driving the entire market. Hell, you can push the GBP price around just by buying or selling a few dozen BTC, the volumes are so low. Guess what I'm getting at is that there's a hidden force behind this, and they're not dumb - but most of the speculators apparently are.
- aneth4 13y ago
  It's very common for markets to peak out at psychologically important levels for a variety of reasons. In fact, I would not call this unusual at all. Anyway, it is trading over $200 now, so it's a moot point. I'd be more inclined to suspect bandwagon speculation than manipulation.
- tomp 13y ago
  What's more likely is that a lot of people set their limit sell orders to 200, because the number is easy to come up with and easy to type.
  - madaxe 13y ago
    Yeah, but that still basically says "Rank Amateurs", because you should never pick the psychologically obvious point, as otherwise you'll end up in the sell queue behind a gazillion others. Always best to go in a few points below the obvious level for your sell, and a few points above the obvious for your buy. If you look at any "real" market, prices rarely adhere to nice round sticking points, because people are at least trying to second guess what the other guys are doing, rather than just acting as though they're the sole person in the market.
    - imatworkyo 13y ago
      alot of bitcoin investors, up too this point ARE rank amateurs... nothing new there "real" markets also have computers and algorithms behind alot of what they are doing. Bitcoin does as well. I'm sure hitting 200 was either someone setting buy/sells at a point of pride because they wanted too, or a coincidence, or people who don't care because they are long-haul investing.
soapbeard 13y ago
One thing I don't get about bitcoin is how the transition from paying for mining to charging for transactions is going to be handled. This seems like a big upcoming change now all this money is sloshing about. I take it the plan for transaction fees is carefully worked out to make it still be attractive to miners and merchants vs charges for visa etc or have I got the wrong end of the stick?
- aychedee 13y ago
  There is no transition required. When send an amount of bitcoins to another address you specify how much of a transaction fee you are willing to pay to the miner who solves the block of transactions your transaction will be included in. Any given miner can prefer to solve transaction blocks with higher fees. Eventually it will get to the point that if you don't include a transaction fee your transaction will just be ignored and not included in the block chain. At the moment it will probably be included anyway because of the inherent reward for creating a valid transaction block.
Keyframe 13y ago
I have something like 0.01BTC (tried mining it once, it wasn't worth it), by this rate it will be worth $200 someday too.
- StavrosK 13y ago
  Someone paid me 0.5 BTC for a $15 subscription a while ago, now it's worth $100.
dancesdrunk 13y ago
I have merely a passive interest in economics, but my two cents: There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple variation of the weighted average over the past hour * 1.05 would easily provide a price that is always rising, unless a user manually gives a lower buy / sell price - and even then that would have to be beat the current price by 5% to make any impact on the spot price. Hell, you could just inflate the prices you show to users by a certain % to create that sort of meteoric rise, even if they do place lower/higher bids - those bids are somewhat based on what the value they see in that moment. Is this a bubble? We just don't know. Currently there are people who are willing to part quite a lot of money for a scarce virtual currency, so by all accounts if there's a demand - the value will rise, especially if supply is limited (not just now, but there will only ever be a finite amount of BTC). Even with the hiccups (0.8 vs 0.7 double spending, Mt Gox crashes) - and a price crash in it's history - surely anyone would think twice before putting down $200 per BTC, especially when it was worth only $15 three months ago. What's convincing these folks to invest, I just don't know. Maybe they see something I don't, but at the moment I just see a very overvalued bubble just waiting to pop. A part of me fears that it's being overrun by folks who don't trust private financial institutions to hide their (illegitimate) wealth, as I don't think the average Cypriot has the wealth, nor there are enough Cypriots (or average / middle/working-class Europeans) altogether to create the demand which would push the price where it is now. Maybe someone can run the numbers; average salary, savings, investments, total # of folks who are tech savy enough to buy BTC, compare that with the uptake in Mt Gox (or other exchanges) signups, volume, traffic etc and put together a more substantial assessment. BTC is something the world needs badly, and over the next decade I can see it becoming incredibly prominent. But the sort of rise we've seen in the past 3 months should've taken at least 3 years; and even then it's an incredible run for what's nothing more than a digital, limited commodity.
- olalonde 13y ago
  As long as there are multiple bitcoin exchanges, it will be very hard for a single exchange to influence the price of bitcoin thanks to arbitrage traders.
eduardordm 13y ago
This last price fluctuation is doing more harm to bitcoin than a moratory does to a country. No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit? Why isn't mining regulating the prices? Is it too costly? My personal and completely uninformed opinion is that bitcoin is doomed.
- rms 13y ago
  It's happening because more and more people are buying Bitcoins are fewer are selling. Supply and demand. This interview talks about the real-time increased demand. https://news.ycombinator.com/item?id=5517634 https://news.ycombinator.com/item?id=5517634
  - mfringel 13y ago
    Every seller must have a buyer, and vice versa. A better way to state it is: "More people are willing to buy at the seller's asking price, than are willing to sell at the buyer's bid."
  - readme 13y ago
    The increased demand only matters if it lasts. I suspect pump & dump. Just wait, it will plummet soon when the puppet masters sell their bitcoins.
- kiba 13y ago
  Why isn't mining regulating the prices? Is it too costly? It is a consensus that mining don't affect the price of bitcoin. However, mining is certainly affected by the price of bitcoin.
- sfjailbird 13y ago
  Seems to me the more valuable bitcoins are, the more attractive it is for vendors to accept them as payment. And the more vendors accept them as payments for real stuff, the more attractive and established they become as a currency. Also, concluding that bitcoin is doomed because too many people want them seems backwards.
antr 13y ago
I'd love to short Bitcoin. Are their any platforms/startups that allow short selling this currency?
- ghgr 13y ago
  Yes, there are. But consider that people have been saying this since BTC reached $30. Most of them would have been / actually are out of the market. Of course, I'm not saying that you are wrong, just that the market can stay irrational longer than you solvent.
  - antr 13y ago
    > the market can stay irrational longer than you solvent 100% agree
OGinparadise 13y ago
Should I cash in my pizza money http://motherboard.vice.com/blog/this-pizza-is-worth-750000 http://motherboard.vice.com/blog/this-pizza-is-worth-750000 or wait for BTC $400 ;) ?
- Fuzzwah 13y ago
  Bitcoin Pizza Index = $2,091,789.81 Wow.
sfjailbird 13y ago
BitCoin reminds me so much of the early days of the internet; the ingenius technology, the promise, the hype, the misconceptions, the rampant ill-informed speculation. And of course the few neat things it could actually do, with a promise of so much more to come. And perhaps, the dot-com style bust at the end that puts things back in perspective and paves the way for real growth and adoption...

77 points by infinitivium 13y ago

Wasn't it like $130 a few days ago? This kind of inflation is really cool for the people invested in bitcoins but this is the point where I would panic sell, but perhaps I'm a coward. EDIT: Link's down, it was $203 at 12.06 GMT.

andyhmltn 13y ago
Yes and a few days before that it was $100. I was watching it out of curiosity yesterday and it went up about $20-$30 I believe just while I was at work. Hopefully it crashes, stables out and then gains use as a currency rather than an investment.
- rplnt 13y ago
  It will never do that due to its design. edit: unless the market is controlled by someone willing to lose money to keep it stable.. so no, it won't happen.
- smosher 13y ago
  > Hopefully it crashes, stables out and then gains use as a currency rather than an investment. That's impossible. The only low stable price is $0 which is useless as a currency. Only when its user base is no longer growing and there is enough value to satisfy the entire user base will it stabilize. My expectation is that unless it dies entirely it will continue to grow until it has more or less total global coverage. With the limited supply of BTC, it has to be worth much more than $200 apiece. A crash just causes problems but if you want to use it as a currency I think what you really want to move the decimal, which is purely a representation issue: it's ~$2/centiBTC.
ewoodrich 13y ago
Well, it's deflation in a broader economic/purchasing power sense. http://en.wikipedia.org/wiki/Deflation http://en.wikipedia.org/wiki/Deflation "deflation is a decrease in the general price level of goods and services" Prices of real goods are rapidly decreasing for Bitcoin, but you are correcting that the exchange rate is ballooning or "inflating" in that sense.
deelowe 13y ago
The word you're looking for is "deflation." Inflation is when currency becomes less valuable.

oleganza 13y ago

It still has just $2 bln "market cap". If it was a payment processing company, you would call it a slow democratic IPO, not a bubble about to burst.

aneth4 13y ago
Market capitalization of a company and the bitcoin money supply are not even remotely similar.

mikecane 13y ago

Is it safe for me to express my belief that Bitcoin value is being manipulated by forces who intend to crash it? I've stayed away from it simply because of that. I fear some people are in for a very rude awakening. Don't count your money just yet -- and, for god's sake, don't try to use it as the basis for any paper money loans! None of you knew about Stuxnet. The story of Bitcoin's infiltration and manipulation is years away from being revealed.

yuvadam 13y ago
Really? Should we talk about $$$ manipulation? We all know about the world finance industry. We all know how corrupt it is and how fucked-up things really are. Yet discounting Occupy - which was violently suppressed anyhow - I don't see people in on the streets demanding to burn down Wall Street to ashes.
- mikecane 13y ago
  >>>Really? Should we talk about $$$ manipulation? This is the same thing by the same people is my suspicion.
Hermel 13y ago
Who do you have in mind? I don't see anyone who wants Bitcoin to crash desperately enough to spend millions on inflating a bubble and then pop it - which is a very risky and costly plan. More likley would be a scenario in which someone who holds a lot of Bitcoins pushes MtGox prices upwards in order to be able to sell OTC at inflated prices. However, given that Bitcoin on MtGox has a volume of USD 20 million daily, this takes a lot of resources. It is much easier to manipulate a low-volume stock on the stock market.
- davidw 13y ago
  Fun fact of the day: in Italy, this idea of "but who's REALLY behind it" is called "dietrologia", or, very literally translated, "behindology". My theory: it's the Mayflowers.
- 13y ago

DanBlake 13y ago

The problem with bitcoin is 1 or 2 events that give the public a 'scare' have the potential to nearly floor the usd value. All it takes is one headline on CNN like "Joe Blow selling Anthrax and Cyanide on Silkroad/Craigslist for Bitcoins" for the general public go to fucking apeshit and cause some real 3 letter organizations to shutter most bitcoin exchanges with secret subpoenas and such. Realistically, there is so much dependency on mtgox, once it went down I believe the price of bitcoins would likely be 10x less than it is currently.

oleganza 13y ago
Almost everyone new to Bitcoin already has heard every scare story about drugs, money laundering, tax evasion, viruses, hackers, conspiracy etc. The news about DDoS or stolen money will not be a huge surprise (unless ALL money is stolen at once :-)
- DanBlake 13y ago
  What I am suggesting is a league above the things you mention. The US generally does not fuck around when it comes to those sorts of things and has much broader power to do crazy shit (seize domains, secret subpoenas, etc..) when it involves national security vs generic anti-drug and weapon agenda.
  - ewoodrich 13y ago
    Drugs dealers typically use a large amount of cash, but that hasn't produced a pervasive stigma about physical currency in the US. So I don't think users will necessarily be dissuaded by reports of criminal use.
Hermel 13y ago
People who are that easily scared normally don't have Bitcoins to sell.
aneth4 13y ago
Nobody who owns bitcoin gives a damn who buys what with it, any more than you care who buys what with your country's currency. It's currency. What could threaten bitcoin is a major flaw in its algorithm, which seems unlikely in the near future, and the hacking of the primary exchange - MTGox. In fact, I keep my Bitcoin at MTGox with the knowledge that if they lose my Bitcoin, the value will plumet to nearly nothing regardless of whether my coins are there or not.

graeham 13y ago

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1]. Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't have an exchange-based economic system without some expected stability in the value of the exchange. [1] - http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania

oleganza 13y ago
If everyone's intention is just to buy low and sell high, then it's a tulip mania. But if there are people who would be satisfied with a stable price, or price above their investment amount, or ability to buy stuff for it, then it is not just a tulip mania. Bitcoin price was pretty stable during 2012. Some people used it as a "store of wealth". Now, you still can use it for the same purpose, but you have to bid up the price a little to take a piece of it.
Hermel 13y ago
A better comparison than tulips would be silver. Tulips are a bad store of wealth (they rot, anyone can grow them, are not divisible, etc), whereas Bitcoin and silver can be stored and easily divided into smaller units. It still could be in a bubble, like silver was around 1980. http://silverprice.org/charts/history/silver_all_data_o_usd.png http://silverprice.org/charts/history/silver_all_data_o_usd....
- jbester 13y ago
  Not sure I buy either of the metaphors. Silver has industrial, scientific, and commercial (i.e., jewelry) applications that create demand and use the commodity. Bitcoin, on the other hand, does not. It's just used as a transitional currency.
  - rikf 13y ago
    It does have certain mathematical properties that make it rare. or at least harder and harder to produce as times goes on that leads to scarcity. And as we all know price = demand / supply

mrjava 13y ago

I can't believe this is catching up

duiker101 13y ago

Can we expect an exceptional fall soon?

Yuioup 13y ago
At some point people are gonna wanna cash in ...

deleted 13y ago

[deleted]

bobsy 13y ago

What goes up... The past couple of weeks has shown how easily the bitcoin market can be manipulated. People used to do this with shares. Buy up all the shares to push the price up. Then get out with a profit crashing the value of the share. I don't think this is any different. I wouldn't be surprised if a handful of parties were responsible for the explosion in bitcoin value. You could point to the Cyprus banking crisis perhaps as a reason for an increase in value but realistically Bitcoin is just one major hack away from being worthless again... Its like keeping your gold on a wooden shelf above a lava pit.. why anyone would put long term savings into Bitcoin right now is beyond me.

brianbreslin 13y ago
If they can get liquidity then you are talking hundreds of millions in profit
Cieplak 13y ago
Are you saying that someone has cornered the bitcoin market?
xhrpost 13y ago
The "price" is whatever the last trade went for. If there are market manipulators buying up "all the shares", it would seem like a big risk as they are relying on there being enough bids within their profit range to sell them back at a profit. Right now for example, you could sell 100 BTC on Mt.Gox for an average price of $203USD/BTC. Try to sell 10,000 BTC and the average drops to about $195, and 100,000BTC would only average $111.

ewoodrich 13y ago

I'm not a substantial bitcoin investor, but I follow bitcointalk.org fairly actively, and there has been a fairly noticeable increase in posts about ASIC (Application Specific Integrated Circuit) solutions being a profitible means to mine Bitcoins. I don't know whether this is a driving factor, but it certainly relates to the expanding market in general. The wide perception of Butterfly Lab's ASIC solution as being a scam has resulted in wide interest in alternatives, which are legitimized by seemingly functional and deliverable ASIC solutions by companies like Avalon. At over 6,000 Mh/S per module, they exceed the best GPU/FPGA solutions for mining almost by a almost a hundred fold (after factoring power consumption), which has produced a tangible market of bitcoin hardware. Regardless of whether specialized Bitcoin ASIC hardware is cost effective, the production serves to legitimize the currency/producing market as a whole (as well as reinforcing the hype/gold rush mentality for miners and speculators). I'm still not sure how/whether the currency will eventually settle, but it is very interesting to follow.

chii 13y ago
having specialized hardware that is a commodity to mine, and later, when mining is no longer profitable, to verify transactions, is a good thing! I m quite glad that it is being looked into.

AndrewDucker 13y ago

It's fascinating to watch this, largely because Bitcoin has no "natural" value. The only utility it has is as a transfer of value from one place to another, and it can do that equally well with a bitcoin being worth $1 or $200. But it's really interesting to watch the value ratchet up, and easy to see how you can do this - if people will only ever sell a bitcoin for (say) 1% more than they bought it for, and people buying things with bitcoins don't care if the things they're buying with it are priced 1% higher than they might, theoretically have been, then the price of bitcoins can keep increasing indefinitely. Until, that is, some people decide that they want to get rid of a lot of bitcoins, and thus are willing to accept less than that, to shift them quickly. Then the price drops. And then more people might also decide to sell, so as to convert the bitcoins they have at the value they're now worth. It's classic sentiment pricing - but without any of the value "stickiness" that you get when there's some utility to be gained from the objects you're trading. (I'm not trying to talk Bitcoin down here, I find the whole thing fascinating. Just thinking out loud.)

lvh 13y ago
I'm not sure if it can do so equally well at $1 than at $200, particularly when trying to transfer non-trivial amounts of value, due to Bitcoin's (formerly) quite limited liquidity. I'm not sure I would have been able to purchase 100k worth of Bitcoin easily, and what would've happened to the price if I had attempted that. If I had been able to, perhaps it would've worked out in my favor.
- AndrewDucker 13y ago
  True, if you're wanting to transfer £100,000 then you're out of luck unless there's an awful lot of liquidity. But then people don't seem to be making transfers that large, last I checked.
tomp 13y ago
The alternative possibility is: the amount of bitcoins kept for trade significantly outweighs the amount of bitcoins kept as an investment. Then, the price (in $) would roughly equal to the ratio of the amount of money circulating in the society over some period of time (in $) the number of available bitcoins. Thus, bitcoin would probably be worth somewhere between $100,000 and $1,000,000.

ck2 13y ago

So how much was that first pizza worth now?

ewoodrich 13y ago
At the original price of 10,000 Bitcoins, it would be presently worth 1,880,000 USD.
- samholmes 13y ago
  Looks like I should be selling pizza
Fuzzwah 13y ago
There's a real time ticker you can watch it on: http://www.ounce.me/ http://www.ounce.me/ Currently: Bitcoin Pizza Index = $2,091,789.81

madaxe 13y ago

The funny thing is that it didn't hit $203, or $201.12, but $200. Whoever is driving this big buys to drive up the price is doing it at very predictable, very specific price points, across multiple currencies. On mtgox GBP, for instance, it plateaus and peaks at very predictable values - £125, £130. Frankly, I think that what's going on is there are a few traders (actual traders, not BTC speculators) who are driving the entire market. Hell, you can push the GBP price around just by buying or selling a few dozen BTC, the volumes are so low. Guess what I'm getting at is that there's a hidden force behind this, and they're not dumb - but most of the speculators apparently are.

aneth4 13y ago
It's very common for markets to peak out at psychologically important levels for a variety of reasons. In fact, I would not call this unusual at all. Anyway, it is trading over $200 now, so it's a moot point. I'd be more inclined to suspect bandwagon speculation than manipulation.
tomp 13y ago
What's more likely is that a lot of people set their limit sell orders to 200, because the number is easy to come up with and easy to type.
- madaxe 13y ago
  Yeah, but that still basically says "Rank Amateurs", because you should never pick the psychologically obvious point, as otherwise you'll end up in the sell queue behind a gazillion others. Always best to go in a few points below the obvious level for your sell, and a few points above the obvious for your buy. If you look at any "real" market, prices rarely adhere to nice round sticking points, because people are at least trying to second guess what the other guys are doing, rather than just acting as though they're the sole person in the market.
  - imatworkyo 13y ago
    alot of bitcoin investors, up too this point ARE rank amateurs... nothing new there "real" markets also have computers and algorithms behind alot of what they are doing. Bitcoin does as well. I'm sure hitting 200 was either someone setting buy/sells at a point of pride because they wanted too, or a coincidence, or people who don't care because they are long-haul investing.

soapbeard 13y ago

One thing I don't get about bitcoin is how the transition from paying for mining to charging for transactions is going to be handled. This seems like a big upcoming change now all this money is sloshing about. I take it the plan for transaction fees is carefully worked out to make it still be attractive to miners and merchants vs charges for visa etc or have I got the wrong end of the stick?

aychedee 13y ago
There is no transition required. When send an amount of bitcoins to another address you specify how much of a transaction fee you are willing to pay to the miner who solves the block of transactions your transaction will be included in. Any given miner can prefer to solve transaction blocks with higher fees. Eventually it will get to the point that if you don't include a transaction fee your transaction will just be ignored and not included in the block chain. At the moment it will probably be included anyway because of the inherent reward for creating a valid transaction block.

Keyframe 13y ago

I have something like 0.01BTC (tried mining it once, it wasn't worth it), by this rate it will be worth $200 someday too.

StavrosK 13y ago
Someone paid me 0.5 BTC for a $15 subscription a while ago, now it's worth $100.

dancesdrunk 13y ago

I have merely a passive interest in economics, but my two cents: There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple variation of the weighted average over the past hour * 1.05 would easily provide a price that is always rising, unless a user manually gives a lower buy / sell price - and even then that would have to be beat the current price by 5% to make any impact on the spot price. Hell, you could just inflate the prices you show to users by a certain % to create that sort of meteoric rise, even if they do place lower/higher bids - those bids are somewhat based on what the value they see in that moment. Is this a bubble? We just don't know. Currently there are people who are willing to part quite a lot of money for a scarce virtual currency, so by all accounts if there's a demand - the value will rise, especially if supply is limited (not just now, but there will only ever be a finite amount of BTC). Even with the hiccups (0.8 vs 0.7 double spending, Mt Gox crashes) - and a price crash in it's history - surely anyone would think twice before putting down $200 per BTC, especially when it was worth only $15 three months ago. What's convincing these folks to invest, I just don't know. Maybe they see something I don't, but at the moment I just see a very overvalued bubble just waiting to pop. A part of me fears that it's being overrun by folks who don't trust private financial institutions to hide their (illegitimate) wealth, as I don't think the average Cypriot has the wealth, nor there are enough Cypriots (or average / middle/working-class Europeans) altogether to create the demand which would push the price where it is now. Maybe someone can run the numbers; average salary, savings, investments, total # of folks who are tech savy enough to buy BTC, compare that with the uptake in Mt Gox (or other exchanges) signups, volume, traffic etc and put together a more substantial assessment. BTC is something the world needs badly, and over the next decade I can see it becoming incredibly prominent. But the sort of rise we've seen in the past 3 months should've taken at least 3 years; and even then it's an incredible run for what's nothing more than a digital, limited commodity.

olalonde 13y ago
As long as there are multiple bitcoin exchanges, it will be very hard for a single exchange to influence the price of bitcoin thanks to arbitrage traders.

eduardordm 13y ago

This last price fluctuation is doing more harm to bitcoin than a moratory does to a country. No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit? Why isn't mining regulating the prices? Is it too costly? My personal and completely uninformed opinion is that bitcoin is doomed.

rms 13y ago
It's happening because more and more people are buying Bitcoins are fewer are selling. Supply and demand. This interview talks about the real-time increased demand. https://news.ycombinator.com/item?id=5517634 https://news.ycombinator.com/item?id=5517634
- mfringel 13y ago
  Every seller must have a buyer, and vice versa. A better way to state it is: "More people are willing to buy at the seller's asking price, than are willing to sell at the buyer's bid."
- readme 13y ago
  The increased demand only matters if it lasts. I suspect pump & dump. Just wait, it will plummet soon when the puppet masters sell their bitcoins.
kiba 13y ago
Why isn't mining regulating the prices? Is it too costly? It is a consensus that mining don't affect the price of bitcoin. However, mining is certainly affected by the price of bitcoin.
sfjailbird 13y ago
Seems to me the more valuable bitcoins are, the more attractive it is for vendors to accept them as payment. And the more vendors accept them as payments for real stuff, the more attractive and established they become as a currency. Also, concluding that bitcoin is doomed because too many people want them seems backwards.

antr 13y ago

I'd love to short Bitcoin. Are their any platforms/startups that allow short selling this currency?

ghgr 13y ago
Yes, there are. But consider that people have been saying this since BTC reached $30. Most of them would have been / actually are out of the market. Of course, I'm not saying that you are wrong, just that the market can stay irrational longer than you solvent.
- antr 13y ago
  > the market can stay irrational longer than you solvent 100% agree

OGinparadise 13y ago

Should I cash in my pizza money http://motherboard.vice.com/blog/this-pizza-is-worth-750000 http://motherboard.vice.com/blog/this-pizza-is-worth-750000 or wait for BTC $400 ;) ?

Fuzzwah 13y ago
Bitcoin Pizza Index = $2,091,789.81 Wow.

sfjailbird 13y ago

BitCoin reminds me so much of the early days of the internet; the ingenius technology, the promise, the hype, the misconceptions, the rampant ill-informed speculation. And of course the few neat things it could actually do, with a promise of so much more to come. And perhaps, the dot-com style bust at the end that puts things back in perspective and paves the way for real growth and adoption...