Bitcoin Forum

Now it is evident that Bitcoin price is at an all-time high. Prices have risen steeply, far too fast for my liking. I don't think such a growth is sustainable. The bubble is going to break very soon.

But what is causing such a price hype? I speculate this phenomenon is caused by the increase in the number of Bitcoin users. Hence, demand increases and supply dwindles. Thus price increases. Are there any other factors that could add to this price hype?

That's a good question, I'm hearing things that vtorrent launched and it is causing for this to be a big pump, there's some speculation something is about to go on internationally (and the rich just got a lot of their money into safer investments), and there's another source of speculation about someone getting the prices moving and everything shooting up in value.
I don't like it either, but I don't want to sell just yet. This isn't exactly something that is easy to read.

Traditionally we use the say reason as supply and demand on bitcoin will take bitcoin to moon. After last halving onwards price started moving up without more dips in the chart. As of now there are many people adopted bitcoin and investing on bitcoin and blockchain related projects. After implementation every project, bitcoin price use to get increase.

No doubt that demands are going speedily high but still here no one telling about the reason of the demand .
Here the exact reason is that the most of the countries are accepting the Bitcoin as a legal assistant after Japan , Russia state and also few similar country , so due to these the people in other countries are thinking that Bitcoin will be legalise soon , so they are thinking that if they will buy the Bitcoin then surely they will make a big earning in the future .
If I talk about my own country then here I myself investing in this and according to the reports the people at age 15 to 35 year are just jumping in the Bitcoin and making increase the demand .
The price of Bitcoin is high in my country India then what the price is in the international level .

I think more people know Bitcoin and want buy it is a small factor in crypto market. The biggest factor is shark and whale want up price Bitcoin, because they want many people think Bitcoin will up hight and hight more, cannot stop up price, and when Bitcoin hit a highest price, they will sell all (take their profit) and wait Bitcoin price down to buy againt ;)

I don't think op this is a bubble, had it been it would have just gone up but as we saw in past few days, it corrected and again shot up. The major factor was Japan accepting it, and followed it's airlines that gave it a shot in the arm. With so many other countries primed to accept it sooner that's also helping it, and as you have correctly stated it's demand has increased a lot. I feel it's has built a resistance levels around 2000$.

a guess some important bitcoiners are selling their bitcoins now. And i even doubt if the price is real

I would have to agree with you on that one. The price of bitcoin has just risen at such a steep rate that I doubt it will continue for that long. The bubble is going to break soon but bitcoin will bounce back from it, I am certain.

i think the price is real and now there are people selling their bitcoin because the price is more high than yesterday but for me, i still hold my bitcoin. but for the big whales, i think they are waiting another movements that will triggered the price into more high so they can sell in the price they want.

while there will be price corrections, while we climb, i don't think there will be any major crash for a reverse trend, and the cause of this is probably japan followed by australia and other country that are adopting bitcoin as a currency

japan is leading bitcoin now with its number one volume more than china, there are also some rumors of big forex broiker accepting bitcoin, this is going to feed this pump even more

People have been asking for mass adoption for a long time and when it happens they are surprised by the results and they call it a bubble. A bubble is when something is being inflated artificially without something "real" backing the sudden growth. What did people expect when Japan openly adopted Bitcoin? China has also allowed exchanges to operate as usual and this has sparked growth and a increase in the price.

This supposed "Bubble" is the result of real events that sparked it's growth and people should welcome that and grow with it. ^smile^

We just spent a month in a sell off from the last high price mark. What makes you think this is a bubble? Asset bubbles usually don't have sell offs like we've seen recently. Sell offs are healthy and what we're seeing now is support building back up for Bitcoin.

What's causing the hype? The press. There's a ton of articles each week about Bitcoin. And much of this press is coming from mainstream news sources. Those mainstream articles give credibility to bitcoin for those people that are afraid of subscribing to the technology without the illusion of a "qualified endorsement"...as if Forbes or Business Insider or the Wall Street Journal is a qualified endorsement of bitcoin or blockchain technology!

The best sign of the market being bullish on an investment is how quickly the recovery comes to a sell off. I'd say this recovery has been quite quick! Enjoy the run!

I think you have basically answered the question yourself. Increase in demand and decrease in supply, that is what makes something extremely valuable, isn't it? The level of awareness of bitcoin has ultimately grown most especially this year and it is still growing rapidly like virus globally. Also, I believe the recent ransomware attacks participated to it which made people to start asking questions about bitcoin and how they can be involved and also its adoption by most countries and merchants as a mode of transaction and payments. As it is, this is just the starting point as we haven't seen anything yet.

I have seen people here deny that this is a bubble. Have we not learned from the bubbles of the past? In every rise there will always be a fall as was with the Tulip Mania, and this could be the Tulip Mania of our time.

I know Bitcoin gives the world some utility but surely this rise is pumped by the irrationality of people thanks to FOMO.

claiming it is a bubble without any rational discussion and purely because price has gone up doesn't make any sense.
if it is a bubble then what do you call all those dips, small dips and bigger dips all the way up?
have you forgotten that price dropped hard not so long ago from ~$2700  to below $2000? then what was that if not a correction?

bitcoin bubble is always caused by china money and new money  :)

I don't think it's a bubble but what is happening is that smart investors are moving their portfolios away from the massive housing market bubble before it pops. Crypto is a gud hedge.

Indeed, you are completely right.

Bitcoin is defintiely in a bubble state right now. However we may see further pumps come before this bubble will pop, and i've been basically saying this since we hit $2,000 and it was evident that bitcoin was in a bubble but i believed that the bubble will see more fuel to it.


Could be this. However what's more likely is that it's 90% speculation. Housing is in a bubble as well, and i would argue that in a bubble far more advanced than bitcoin and when it pops it'll be absolutely catastrophic.

Prices are now rising too fast, far beyond the previous expectations
I think someone is manipulating the price

I am not an economic student nor am I an expert in Bitcoin but what I understand is that bubble burst can happen when there is an overabundance of speculators and these people can suddenly go panic once the value of Bitcoin dip a little. However, this has been part of the nature of Bitcoin that is why we are seeing corrections from time to time which is kinda healthy actually. I prefer to hold to my Bitcoin no matter what, at least for the next two years.

Commonly people will really answer about supply and demand because this is the common thing which do makes a certain price increase,when theres a demand then prices would go up and thats the thing is happening into bitcoin.Adoption is on the move which bitcoin is already been gradually being accepted by some countries already how much more on this upcoming august on which another country would decide to adopt bitcoin.Expect for the prices to increase even more on upcoming months.

Its hard to say what is causing a bitcoin bubble.

The same thing I guess as with any other rapid price explosions .It happen to be the self fulfiling prophecies and a fear mongering of not using the option to make profits.

People are dazzled by emotions. Mostly people see others gaining money and they are getting terribly envious about their peers. And the greed grows in them to enourmous proportions.

Vuala. The recipe for the bubble - human sinful nature.

The first thing that comes in everyones mind when somebody ask about why bitcoin price bubble is only the demand in bitcoin increases, many companies and countries accept bitcoin as another payment option, and holding it for a long time.

I recon its a number of factors causing the Bitcoin Bubble,

The recent news articles relating to Japan, Australia, Russia and the U.K is all good
news and adds to the exposure, hype and excitement which in turn has to create new investors.

I also think existing crypto users are buying in possibly thinking that the value is
not going to fall and that its only going to rise, similar thinking prior to the quick down shift last month!

its all adding to the momentum . . .

There are numbers of factors related to this bubble I reckon,

1. The advancement of technology and digitalisation of everything
2. Japan accepting bitcoin.
3. The momentum of all of this.

I hope the bubble doesn't burst soon and we crypto users lose all our money, but I definitely think it will burst in the next 5-10 years.

Actually this is indeed such a hype, but you need to know that the system in the bitcoin is very awesome and I'm sure in the future will be adopted or bitcoin technology used by all companies in the world. Indeed one of the factors that makes the price very high bitcoin is because of the growing number of requests to get the bitcoin, while stock available is absolutely not appropriate from the requests always come every second.
 

The value of Bitcoin will increase more, but not fast as now. One currency can't increase always, need time for down and wait good time for increase again. This bubble Bitcoin and Cryptocurrencies will breakdown, but I can't know when

This is a good question. Most of the people here are so in denial that they won't even admit that this is a bubble, so it is refreshing to hear somebody who does recognize the reality of the situation.

The reason for the bubble is the nature of bitcoin investors. I wrote a post sort of related to this recently:

http://www.demoinvestor.com/articles/00000001
Organizations and fund managers on Wall Street have not begun to consider Bitcoin as a reasonable investment as far as risk versus reward goes, and rightfully so. Experienced investors prefer assets that either have a long history, or whose value can be measured by fundamental data about the asset. Bitcoin is severely lacking in both of these areas. As a result, the price is driven up and down by retail investors trying to get rich quick, who do not know how to invest. They fall into buying and selling frenzies far more easily than institutional investors would, which causes snowball effects to build up easily.

This basically describes what I believe is the reason. Bitcoin has historically consistently formed bubbles. This is because of the nature of bitcoin investors. They are retail investors who want to get rich quick. They are inexperienced and usually investing small amounts of money. They are basically just weaker hands who jump on board with buying and selling frenzies very easily.

If you read the article, you'll see that I mention a solution. The solution is that bitcoin needs to earn the trust of institutional investors. I am not sure that there is not a whole lot that can be done to achieve this other than wait.

This is standard argument against bitcoin - the price of BTC has risen too fast, therefore it is no sustainable, and it must fall.
But as you said yourself - prices are high because number of bitcoin users is growing - this would indicate organic growth and not a bubble!
Bubble would mean totally artificial price spike - caused by actions of market speculators, whales and bots.
Scaling resolution is upon us, also Japan legal adoption happened, Australia will adopt BTC in July, Russians changed their anti-crypto stance etc.

Maybe in my own perspective the hype that we are currently seeing right now are caused by big countries adopted bitcoins as a mainstream payment.Big exchange are built on those countries which helps bitcoins price to pumps up

The notion of breaking bubble in a short time is heard for a long time and in the past nine months the price of bitcoin has always moved up and nothing happened and the price still keeps on moving higher,where is the bubble and when is it popping,we are seeing more people investing in bitcoin and so is the reason we are seeing higher valuation and not a simple bubble which can be broken altogether.

i agree with you, thats what i am thinking also.
 there are so many companies already who accepts bitcoin and this will lead to the increase of the demand.
yet low supply because of the fact that some have bought and just plan to hold it.

Last time I read news that Japan have legalized bitcoins in their country,and most of the Japanese people love investing and most of their life savings are held in investments, so many Japanese people are interested in buying bitcoins and thus the Japanese exchanges also show this fact that there is a great demand for bitcoins in Japan, by watching the price chart of Japanese exchanges. Last time I checked there was a $100 difference between other exchanges and Japanese exchanges where bitcoin was trading very high and demand is still pretty much high.

Well I guess RSK have something to do with this increase, aside from that Bitcoin had been in a bullish position for months now.  The big company in Japang joining the bitcoin blockchain technology, and the upcoming Australia acceptance.  This probably hype Bitcoin and bring FOMO to new investors that result in this spike in price.

What is causing the bitcoin bubble you say?

1) people holding BTC

2) people adopting BTC

3) places where having BTC makes real sense (Venezuela, South Korea, Japan, India, China, etc etc)

As to frigging WHY all this is going on at the level that it seems to happening (perhaps FOMO) I've not a clue.

But if people are holding ..mined or otherwise....and more and more folk are adopting with 80% of coins already made...

and hyper adopting in some places due to the nature of their countries issues/plans/desires

well hell it is zoom, zoom time

All the above means it is fulfilling a need for those doing the above actions

but at the very least..it is like way, way more folk are coming on board and or holding at a rate that is unexpected by me

so heck....it is just a likely to hyberbolic as not ..especially if adoption ..or what do they call it 'market growth' continues

at this rate...hell...it is obvious it is providing some kinda relief to the countries mentioned above to boot

for all I know this very fact of NON gov't controlled currency is not its biggest draw now...as a store of value

so I wonder...what if even more come on board from word of mouth from these countries with like-minded issues and desires?

assuming btc and crypto offer some real relief...hell we could be at 5,000 usd BTC by next month at this rate

as a holder this is great thou the pucker factor at these prices is getting pretty intense :)

I'm out of ideas, no idea why it is happening as I guess above...but hard to ignore it is happing as we speak

boom or bust, chump or champ, we will be the first to know I guess...bubble it may be..but hell at this rate it may bubble to 8k and
fall back to 4k ...where it breaks is at anyone's guess right now

wild stuff

I think it's stupid to asume it's a bubble how do you know? Maybe it is maybe it isn't. Maybe some big bank has 2 trillion sitting ready to pump into BTC if that was true then this IS NOT A BUBBLE so your statement is wrong. But maybe it is. I guess it bothers me that everyone is just statiing it as a fact that we are in a bubble when you damn don't know. Time will tell us if it pops then it's a bubble.

Well for this newcomers are believing that this could be the break out japan and australia is a well established countries and with them joining this project many things will be expected. Just wanted to really make sure that this could go up and not just a hype always research and do your homework.

Well to me there is good bubbles and bad bubbles....if it bubbles to 10k and drops to say 6k ...I can live with that

slow adoption and price would be best..but bitcoin does not seem to work that way it is all drama

so pump (bubble) to 10k and dump to 6k works....IF the fundamentals work ..and at 6K it resumes its climb steadily (non-bubble)

or balls to the wall (bubble) as a repeat....

crap can't go up forever.it can go up too fast and still recover and go up too fast again in this bubble like cycle

anyway just saying.....its a bubble in my view because of the speed it is going up ..but hell ..... when it busts are

the fundamentals good enough that however it dumps ..is it just to catch it breath and resume again

seems to be the pattern..I certainly don't see a bubble to 5k and then crash to 1k...but I am expecting if it did get to 5k
a crash to say 3.5k and btc being btc and loving sideways sit there for say 3-4 months between 3.5 and 4k while it
digests at this price..then start the merry go round again for the next great overshoot up and a repeat

btc seems to be how it works :)

(take all with caution I say...at one time I drank the BFL kool aid..thus am tainted by often being wrong) :(

I think you are wrong this time, bitcoin is not in a bubble right now. New money have actually flown into crypto world. If you look at other alts you will find similar surge in them that suggest new investors are interested in cryptocurrency as a whole and not only in bitcoin, but to buy all of the other alts they have to buy bitcoin that could be the reason behind this massive pump we have.

Assuming this increase is a bubble, I believe the one that caused it is the good news that is coming from the development and adoption of Bitcoin in a different country.  Now that July is coming, many speculators think that bitcoin would probably double in price just like what happened when Japan accepted Bitcoin.

So far we have some analysts saying that bitcoin is totally undervalued and the true value of BTC should be at least $10000
They based this opinion of bitcoin's ability to be used as ultimate ledger, primary for notary services.
If we consider that bitcoin is not only a ledger for storing data, but new economic concept, monetary system and store of value at once?
I am not sure if we are longer in a bubble or it is just investors realized that bitcoin has potential.

I dont think you can compare investing in Crypto currencies to
investing in stocks and commodities. Crypto or to be general Bitcoin
is accessible to small money holders and large, anybody after jumping
through the usual security hoops can invest $50 or without any
security or identity verification for $15.

Lets see how anyone fairs out investing in bank shares with that amount!

Its because of its accessibility why bitcoin's value fluctuates and not everyone
is involved to get rich quick there are plenty of long term investors.

Bitcoins is not bubble but it is increasing the value of bitcoins, because many people around the who choose bitcoins
for investing into it than other instrument of Investment, bitcoins price increased because it is limited amount of bitcoins. We know the law of demand and supply that is why bitcoins is increasing now.

Isn't that too hard to manipulate the price if there is a $46,863,276,862 market capitalization now? I think that it is because media attention and more people recognize it and also many of them buy it to sell it later for more.

It seems you misunderstand the context of hype in there.  It is not a hype of baseless stuff.



With all the adoption and good news about bitcoins, certainly the hype is being produced.   Hype is not a bad thing and it is needed to spread out awareness through out the globe.

Are you talking about the bubble that started in 2010 at $0.10?  Dollar parity?  Or 2011?  Or 2012? 2013? 2014? 2015? 2016? or 2017?   Assuming each time is a bubble has been a strategy that makes it easy to miss gains in fiat terms.  Every time the price hits new highs (and I think Nov/Dec 2013 was an artificial MtGox created high so there have been plenty of new highs or at least 1 year highs in between) articles and people say "bitcoin bubble" this and "bitcoin bubble" that.   Anyone who thought it was a bubble at any of those times and bought (or mined) and held, has done well.  

Usage is increasing - whether it is for transactions, "digital gold" wealth preservation, hedging, trading, or whatever.  Likewise, new supply decreases at each halving, 1800 new BTC/day now, 900 new BTC/day in less than 3 years.  It is simple supply and demand which sets the price at the margin.  Sometimes people panic and the price drops from $27xx to $19xx like it did a few weeks ago and the people who panic sold at $19xx now missed out on another $900-$1000/coin.  You see posts from people who sold at any point between 2009 and now wishing they hadn't tried to time the bitcoin market.

the interest of the people is also a reason of increasing the price of bitcoin. but the news that we are hearing in favour of bitcoin are also causing the price of bitcoin to increase. i am sure that in near future we are going to hear more and more good news about the favour of bitcoin.

Every rise?  Not quite.  For example:  gold is nowhere near the same price it was 50 years ago. Ditto silver.  Ditto oil. Ditto real estate.  Ditto GE. Ditto Apple is not at its 1985 price. Ditto MSFT.  Etc.

Ditto bitcoin 2017 compared to 2010, 2011, 2012, etc.  Just because some people don't see the utility of, e.g. Bitcoin, doesn't mean it doesn't have value or is a bubble. It just means it is easier to be a critic than a creator.

So what you are trying to tell here,is it a good thing to invest at the rate or not,i would suggest waiting for a correction before entering bitcoin,but if you have the bank roll and the confidence then you are good to go if you are planning to save for a long time,i could not see any particular bubble formation with bitcoin,they are getting more investors and that is it.

All the bubbles are irrational, they are based on the last fool, nobody wants to stay behind on the rise and that's why the price bursts, how good bitcoin can be divided into fractions, so tant.

You can put any value on it... But the analysts aren't the regular people! To make the price 10k/BTC, each person on the world would have to own about $24 worth of Bitcoins... You see that happening anytime soon?

I don't.

Stocks, bonds and real estate are all at crazy high levels in the USA, Candada and much of Europe.

People are also losing faith in the USD in general, and Trump is a loose cannon.

Its an unstable world. BTC is the perfect speculative investment, even though the actual network isn't in great condition (transaction fees, slow times etc).

Then do you deny that this rise is abnormally fast and that its driven primarily by FOMO? Try to see the real situation that is going on in Bitcoin. It cannot scale, it is in the middle of a "scalability war" between different camps, and we are threatened with a blockchain split because of the incoming UASF this August 1.

By the way to make things clear, when I say bubble I do not mean Bitcoin is a bubble. No far from it. What I mean is the whole cryptocurrency market in general. I should have said "we are in a bubble" instead of "it is a bubble". So meaning Bitcoin is overvalued.