Bitcoin Forum

It is my belief that Bitcoins' current price is not dangerously speculative nor are they in a bubble of any reasonable magnitude.

As someone who deals with website rankings, trends, and internet virality on almost a daily basis, I immediately became interested in just what fashion Bitcoin's user population is expanding as a possible indicator for why it is BTCs have experienced such a significant growth in the past couple months. A few questions arose: "How much of BTCs recent gains are due to speculation, hivemind, hype, and hoarding?" and "Does BTCs recent growth correlate to a greater number of users?"

In attempts to answer these questions, I looked at some traffic data from Alexa.com:
http://traffic.alexa.com/graph?&w=400&h=220&o=f&c=1&y=p&b=ffffff&n=666666&r=3m&u=bitcoin.org

And the Google insight trend for the term 'bitcoin':
https://i.imgur.com/qkSsi.png

And finally the price of BTC in ~the same time period:
https://i.imgur.com/rHfjt.png

Although you may find this graph rather uninteresting, I see this somewhat loose correlation as an indicator that the recent jump in price is not due (primarily) to an increase in hoarding, speculation, or hype, but rather to a simple jump in users. This is not to say, however, that hype did not cause the jump in users and interest.
It is simply being said that Bitcoins are unlike precious metals as of late in regards to their principal reason for an increase in price.

What is your take on it?

If you found my post helpful or interesting, any donations would be hugely appreciated and help my enormous college debt immensely:
18DFtagHBF229VAqgxPPfo2AjwVq6bRZ2S

I fail to see the difference between a bitcoin user and a bitcoin speculator.
what are all these new users using bitcoin for?

As we know, BTCs value isn't judged by its usefulness and application but by attention and revolutionary nature. The more people are interested in it, the higher the price, the more it will be used/spent. Period.

I'm only relatively new (February, 2011), but I use bitcoins to buy things.  That's kinda what they were made for.  I have some savings, but I spend quite a few.  When I do, I buy new ones with the fiat I would have spent.

Exactly. And to steal a quote from Bittalk.tv, who referenced The Pirate Bay's founder saying: "If 10% of the black market was dealt with using BTC, their value would increase by a factor of 600."

This is not to say the black market will be the largest medium wherein BTC are spent. It is simply an example to put things into context.

If you're referring to this (http://falkvinge.net/2011/06/16/bitcoins-four-drivers-part-one-unlawful-trade/), then it's not the founder of The Pirate Bay but the founder of the Swedish Pirate Party: Rickard Falkvinge.

If that's true, you should be able to do pretty well trading against such people.

if bitcoins were stabilized the black market could use it. But right now is just the internet version on monopoly.

If the black market used it, it would stabilize.  Welcome to the chicken and the egg.  However, if I ran a cartel I would pick up a few thousand and then push it really hard.  The crooks who can grok it will make out handsomely if they can explain it to their buddies.

unfortunately, your "Period" prevents me from adding how stupid this argument is.
reminds me of the time when business were judged by their number of page impressions instead of a business plan or revenue.

So I take it you would find any gold-owners stupid if gold wasn't used in jewelry/decorative purposes?

Buying a mutual fund and going to sleep for 10 years will beat even the best btc trader

Not at all.

An optimistic outlook for a mutual fund is 7-9% gain annually. That's practically nothing compared to the returns people have made on BTC.

yea everyone sell your bitcoins so I can buy cheap  ;)

well, I doubt you guys are gonna sell it off to about 0,20$ or more anytime soon, so naaa. I'm not buying.

We won't have any idea who is right until bitcoin has existed for 10 years.  Or if your mutual fund will even beat inflation.

To me this is the Core of the adoption process. People Buy some BTC,, save some, spend some, and Buy some more... I think You're Doing It Right !
+1 :)
May the Bitcoins Flow4U !

Not quite sure what you're getting at, Chod.

Implying that A-shares of BRK experienced a bubble?

Not much can be predicted solely based on technical aspects of graphs, so I wasn't clear.
And there hasn't been worry among any circles about a bubble among BRK.A shares.

that maybe be false. for the decade leading to the most recent crash, mutual funds lost money, on average.

There is no difference at all betwen an speculator and a user. Its just that some people like to judge the motivations of other people in the market. What they deem its good are labeled as users and what they deem is bad are labeled as speculators. And because everybody judges in a different way, you have all type of cracy clasifications. Its a useless distinction. Everybody is a user, just with different motivations.

All BTC investment for short term gain is "speculation" at this point. I don't look at this as a bad thing. It is what it is.

Digital currencies have always been used to support an ecosystem. Without this ecosystem the value is zero. The BTC ecosystem (game) right now is an online "Stock Market Game".

Until someone creates another use for BTC outside of the "Stock Market", it will be relegated to gambling chip.

so I'm one of these evil people who label the motivatio of others, because all bitcoin usage that I know of I label speculation.