Bitcoin Forum

At least thats how it works in stock market. But it doesn look like too many players wanna get rid off their coins. I guess most people with coins go with the flow.
What is reason you are not selling?

The bitcoin market cap is still in the 100 million dollar range

If "instagram" is worth $1b, then bitcoins are worth much more than that. Not selling until triple digits

http://en.wikipedia.org/wiki/Veblen_good

it went up $10 in 2 montns. Why sell? I know someone who sold at $13 and they're kicking themself over it.

Considering that I keep a client open all the time and it is always uploading the blockchain at full speed to other users,
I would say people are pouring in like rain!!!

Better keep those bitcoins!  ;D

seems to me that price only going up cause too many dreamers are out here

Isn't that what a market is? Either too many dreamers or too many nay-sayers!!  ;)

Inevitably this short term trend will correct and reverse and then people will suddenly find themselves holding more bitcoins that they thought they needed which will fuel a spending/exchanging circle until we find a bottom and repeat the whole pendulum swinging cycle.


The reason this is so hard to picture is because many people falsely think there is a such a thing as an equilibrium.

The reality is an equilibrium is purely theoretical and in practice the market is constantly readjusting. Currently the market is readjusting to a rising exchange rate, which if the demand keeps up might rise for a while longer but there will come a point when we run out of people wanting bitcoins, remember people can't eat them, or wear them, pr live in them and there is a finite number of people, so yes there's a limit to the demand and when we get to it the trend will reverse and the market will continue to correct except now it will correct in the opposite direction where even the correction itself will become a contributing factor to the correction until again people realize they could use some more bitcoins instead of other stuff where the market will again correct. And this will go on and on and on for ever, because there is no equilibrium.

un-possible!

As long as the fiat economy is mostly functional, Bitcoins are likely in very strong hands.  We'll see how many are selling in a few months, though.

I'm not selling because I don't need to buy anything. It's this revolutionary concept called "saving." I know, I know.

"Saving" with Bitcoin is probably a very stupid thing to do. It's more of an "investment".

I disagree. Saving with fiat, however, definitely would be.

Nice long ramble, but honestly right now, no one knows what the hell bitcoins are. News is spreading like wildfire and new people are coming every day.

Its about supply and demand.
Right now the supply is there, but the demand isn't.
The price is still going up up and away.
Once people actually find out what bitcoins are, there will be a demand, its a sloooooooooooooow process.. Right now slowly more people are finding out and more merchants are accepting.

The demand (for the supply that "is there") is clearly there, or the price wouldn't be going up.

If you're saying we're nowhere near the ceiling for that demand, I completely agree.

3xxx range for me. (~50b$ mkt cap)

Fiat is guaranteed to lose purchaing value. Bonds rates are less than inflation. Equities are generally overpriced and heavily manipulated against the little guys. So the average person (who can't afford to build their own business, or put savings into buying real estate) it really just left with commodities and bitcoin as reasonable options. Most commodities are hard to sell rapidly if you need it. Even with gold and silver, you can expect to lose 5-10% in USD when purchasing and selling. Bitcoin seems to be a good choice among a mixed bag of savings, along with things like guns and bullets, non-perishable food, PM's, etc.

High price? maybe $1000/bitcoin. but 20ish., that's not high.

I tried, man! I dumped $30,000 worth of coins on the market, and the price is STILL rising!

Thanks, got a few at 22.05 and 22.15. Let's see if I'm the stupid?

I was selling at $22.40 to $22.50, so you didn't get my coinses.

P.S. I was not selling them because I think we're at the top of the bubble or whatever, I was selling them because I need to buy something as soon as possible, and at the $22 mark I can finally afford it.

Just as a P.S.

I don't ever plan on selling my bitcoin for dollars. I might buy something with them, but it will not be the less desirable $USD.

Well, ok. I would sell for $ at Mt.Gox + %25. Then I would quickly replace my coins. 

I suppose it's reasonable to assume bitcoin fundamentals are quite different than that of stocks. Then to answer your question, I'm planning on supporting the bitcoin ecosystem and I'm only going to spend my bitcoins at merchants accepting them. I'm not interested in holding government controlled currencies :) I'm not speculating; rather I'm transferring wealth into bitcoin. It's a one-way ticket.

That would be incorrect. I haven't heard of anyone buying BTC for status yet. If you think BTC will be worth more tomorrow it makes sense to buy it now.

As long as bitcoin is around, that's where my wealth will be too.

Yeah, I think you might mean Giffen Good instead, in that a higher BTC price shows greater adoption, making it more attractive.

In economics, Veblen goods are a group of commodities for which people's preference for buying them increases as a direct function of their price, as greater price confers greater status, instead of decreasing according to the law of demand.

The wikipedia explanation is a bit misleading as it focuses on just one type of Veblen goods, such as "luxury" or "prestige" products. This is not the only aspect though. For example, gold is considered a Veblen good. As the price of gold rises, demand for it increases as well - not because it's becoming more "prestigious" but because it is perceived as a better store of value.

Bitcoin is very similar to gold in this respect, and should exhibit similar demand dynamics. I suspect that many serious investors will only start considering Bitcoin when its "market cap" exceeds 1 billion USD. At this point a virtuous cycle between Bitcoin price and demand for it will start working full force.

Giffen good, which was also mentioned here, is completely different. It has nothing to do with a virtuous cycle between price and demand, it's just a rising demand for inferior product despite rising prices because a preferred alternative becomes prohibitively expensive. Since there is no "better alternative" to Bitcoin, this obviously does not apply to our situation.

1 BTC = $100 before the end of the year  :P

Here's a snapshot of current market stats:

Total BTC currently =                                   10,759,550
Current Price USD/BTC =                               $23.50/BTC1
Current Generation =                                    1,278,340 BTC/year
Inflation rate =                                           11.88% over the next year
Total BTC in one year =                                12,037,890

Current Market Cap (price X total BTC) =         $255,539,313
Nominal Market cap at $23.50 in one year =     $282,890,415
Real Market Cap in one year at same $23.50 =  $225,181,243

Required demand by end of year for current Bitcoin value =  $30,358,070 at $23.50/BTC

Now for the fun part:

http://media.tumblr.com/9a740e41a571d7730135dabba0664d1f/tumblr_inline_mhw1deFnM51qz4rgp.png

Coinbase is currently selling $1,000,000 of Bitcoin per month. (http://blog.coinbase.com/)

At the current rate: $1 Million X 12 =     $12 Million/year
OR at $23.50:                                 510,638 BTC/year

Needed demand, just for inflation:    1,278,340 BTC/year

Thus, Coinbase percentage estimate of needed yearly BTC demand: 40%

And that's just from one exchange at their CURRENT demand!

What if we could gather demand from every other exchange? What if we could accurately predict an increase for demand in the next year?

For fun, let's assume we can!

So, let's assume the other 60% demand is already there (Actually, I think this is probably true). Just based on these current estimates, it seems that demand is strong enough to at least keep up with inflation; showing that the demand for the new 1,278,340 BTC/year is MOST LIKELY being met with the supply at $23.50/BTC1.

If we could accurately predict an increase in demand over the rest of the supply in the next year (Again, I think this is probably true as well), then demand will surpass inflation, begin cutting into the older Bitcoin stock, and consequently increase the price.

So what will the price be in a year, you ask?

http://www.youtube.com/watch?v=l91ISfcuzDw

Obviously, I'm optimistic and this doesn't prove anything... but it was fun anyway  :D

---

Keep in mind, on the other hand, if demand can not keep up with the supply from inflation and sellers, the price WILL go down until it can.

But like I said, I think it can -- so $23.50 doesn't seem that expensive to me. In fact, I think demand is strong enough right now and will only grow, pushing the price up even further.

Remember, this opinion is only based on one set of demand data, but I think you all get the picture...

Oh ok, I didn't know they had to be inferior.  I read an article in which they said gold was a Giffen good, which turns out to be a wrong use for the term then.  Guess you learn something new every day...

A Giffen good is an inferior good with an upward-sloping demand curve (an increase in price increases consumption, a violation of the law of demand) due to the substitution effect (increased consumption of alternative goods that are now comparatively cheaper) being overwhelmed by the income effect (less total purchasing power leading to increased purchases of the cheaper (Giffen) good). The price of the alternative good wouldn't have to change. While micro profs love it, real-life examples (and, it's debatable whether they exist at all) are limited to things like rice in China or potatoes during the Great Famine.
As far as btc/gold being Giffen goods...just, no.
These are the sort of things that happen when people talk about economics with words instead of graphs  :-\

There are short term speculators, medium term investors and long term investors, all are sitting there waiting to buy if there is a drop in price, that is the reason the price just dropped briefly and rise again

My strategy is based on a long-term bull perspective.

If I believe that prices will rise in the long term while fluctuating up and down in the short term, then my strategy is to just buy more when the price goes down because I believe in the long run it will go up again. If I sell now and I think it will go up in the long run, then I'm going against my own predictions because I'm selling before it goes up (i.e., I'm selling low). But if I buy after it goes down, then I'm buying before it goes up (i.e., I'm buying low).

I've had the same strategy from when the price went from $3 to $31 and then back to $2 again, and it's been pretty successful. At current levels, I'm not selling, but I'm not buying anymore.

Once we see the next price crash (it WILL happen, not necessarily from $31 to $3 but could be something like $50 to $20 or infinitely more possibilities), I'll just buy more.

Why will we see a price crash? Because unlike a real free market commodity, the number of coins created is unchanged regardless of demand, so price stability is impossible. Still better than paper currencies though.

Until triple digits?

Weak hands.... I'm sure that if you had been around in 2010/2011, you would have said... "Not selling until $100"!

And if you were around in 2009, you would have said... "Not selling until dollar parity!"

Didn't past history teach you nothing?

There's no point in selling - at all. Wait for +5 digits, and you will be able to live all your life only on BTC.

Who needs dirty fiat money, when you have the real thing?

Why are you resurrecting so many threads??