Bitcoin Forum

This is all about that question again I keep asking.

What is the reason for recent rise in price? How can I find out what people are gauging their buying / selling off or is it pure speculation?

Sorry to keep asking this one.

I believe so too ^

Its bitcoin,the price changes constatly,it will lower soon or even reach 200$.

The Chinese based Baidu anti-DDOS service listed on NASDAQ is now accepting bitcoin for payment. This is very good news for bitcoin and its adoption.

Thats why increased demand of BTC is there I believe.

Bitcoin is the future, new investors came and put some money in :)

money in = raise

There was also a correction and some events that drove price down then up

The only reason is market price. Everone can buy and sell btc....
More people wanted to buy.

Obviously, but that's not the question I'm asking. Everyone keeps saying, duh because people bought. This is a very unimaginative. But why? There have to be real world tangible reasons for confidence, such as the Baidu connection that was made. I'm always interested in why the sudden increase? It was fairly static for ages but then it suddenly it hits $150 for the first time in a long time, and perhaps this time it will be a stable price not just a bubble.

I'm not sure that there was any particular news or catalyst. Price tends to follow price, and we've been in a bull run for a while. My thinking is that a lot of this run is being driven by incoming Chinese speculators, given the increasing share of exchange volume in CNY.

Here is the answer you are looking for:

There is a limited amount of bitcoins. Generally, more people are buying bitcoins as it becomes more widely adopted,  and that is causing the price to rise steadily. However, when some people see events like the Baidu announcement, they believe that the price is going to rise even more in the future so they buy now before the price rises, and and that drives the price up quickly.

Whether it is investors or speculators that are driving the price these days one thing is for sure. CHINA  :P

Baidu.

I believe the 40% difficulty increase also put some weight...

Sigh. Difficulty does not affect price.

Why not?

Because price affect difficulty, in other words electriciry cost necessary to run minners decide how many are profitable if these exchange mined BTC for USD immediatelly

So fixed quantity of coins, plus increased popularity = increased price. So a the general awareness of Bitcoin is just pushing it up as expected. So I suppose what we're interested in is when will more mainstream awareness will hit. So if some law comes in to block Bitcoin then price will probably go down which is likely to happen quite a bit as Bitcoin maneuvers its way in and tries to break down barriers. So there's a reason not to panic about rising prices at least.

Lol, no one panic about rising prices, but when the price starts falling, a lot of panic sells happens. It is natural for human, when things go better than expected, we dont notice much, but if they turn worse, we overreact

Thats why we should sell now while its high, or again should we be greed and wait :P

yea agreed its human nature that when going good then nothing panic as any thing going wrong and against then panic starts and many things become wronge  ;)

The reason I panic when it's high is because it may get too expensive for me to buy more. I always try to bear it in mind that there's no way Bitcoin is stable and there must be more crashes to come but it's still a little worrying. I don't want to wake up and only be able to buy 0.1btc per month!

Get used to it. That day will come  ;)

I think

you need to analyze the market gox,btc-e,cryptsy,etc


what events or mutations both affect the price spikes

When that happens then the price falls


or when there is something useful
for example for the future of the system and its popularity bitcoins in the shops or bars of New York

i cros my finger wont about this stimul ;)

if the mayor many milion metropolis of touts everywhere installed terminals
to pay or receive payments
You can also buy different products and


I think these are the key factors that affect the price


This what i think about this realy my situation

First, in contrast to a few years ago, newly mined coins are only a small fraction of the supply of bitcoins in the exchanges. Any argument that mining affects the price is diminished by this fact.

Ignoring that, you might argue that the increasing cost of mining shifts the supply curve because miners try to maintain their operating margin. However, the number of coins mined at a lower margin drops as the margin goes down, so it actually just changes the slope slightly without a significant effect.

Please note that the supply of newly mined bitcoins is fixed regardless of the cost of mining them, and this is different from the effect of higher cost in mining things like gold and silver.

Finally, it is clear that price affects difficulty by placing a ceiling on it. If the price drops, then the difficulty will also drop because miners that are no longer making a profit will stop mining.

It seem to me that for good currency flow in a market there needs to be a more stable price. While if bit-coin gets bigger it's price will have more inertia it seem like it won't be that stable for a while.  I worded if having a meta currency comprised of multiple methods of "backing" would be better for that. Or it could be as bad as bundling mortgage derivatives and have a horrible delay for matching value with it's component currencies.

One reason, which will become increasingly more important, is that the difficulty level is skyrocketing exponentially. This means it's harder to mine BTC, which makes them more difficult to obtain (scarce), which makes them more valuable. Supply and demand.

Not true. The supply of newly mined BTC is invariant. It doesn't matter how difficult it is to mine. There is always 25 new bitcoins every 10 minutes regardless of the difficulty.

increased demand

Look no further, here is the definitive answer in 10 easy steps:

1. Stoned, uninformed slave, waiting for the next supply, 0.1 $/BTC

2. Experienced user, they say they cant go down, keeping some BTC for the next shipment: 0.2 USD/BTC

3. You know what? Deflationary! Keep enough BTC for the forseeable future: 0.5 USD/BTC

4. Investior: Gee, this is going to be big - but it can also go to zero! Don't invest more than you can afford: 20 USD/BTC

5 Speculator: Nice graph! Going up! All my 500 dollars in!   10 USD/BTC

6. Buyer and holder: 10000 but - we are too few and don't have big enough guns: 100 BTC

7. Speculator with leverage: To da moon! 300 USD/BTC

8. Speculator speculating on the speculator: This is too crazy too quick! Going down! Sell!   100 USD/BTC

9. Speculator speculating on the speculators speculating on the speculators: 60 USD/BTC

10. Speculator......... 170 USD/BTC

170 in the next few hours is my prediction.

Not 170 yet? 169.99998: But it was rather close, don't you think?

Yes, there are 25 new BTC every 10 minutes or so, BUT the amount you receive in a given time period is less because your hashing power is reduced, relative to the total hashing power of the network. Another way of saying that is that there are a lot more people (hashing power) competing for the same amount of BTC than there were just a few months ago.

The result is the same: bitcoins, for the individual miner, are more difficult to obtain. I know mine are. If I had kept only the hashing power I had six months ago (or even 3 months ago) I would be generating almost nothing now...although it was a lot back then.

I understand what you are saying, but in this case it is the number of miners that makes the bitcoins difficult to obtain, not the difficulty. If there are a 10000 miners, each miner will receive an average of 0.0025 BTC per block, regardless of the difficulty. If there are only 1000 miners, then each miner will receive 10 times that -- again regardless of the difficulty.

Look at it this way -- the purpose of the difficulty is to keep the supply of new bitcoins constant. You are saying that keeping the supply constant causes the price to fluctuate.

That's not what I said, but I'll drop it now.

But to mine something today, they had to buy expensive harware, so they are more likely to not sell cheap, thus hold coins now.

I also believe in this, difficulty going up to fast cause some people buy BTC and hold.

I don't think any specific news has caused the hike, but rather a combination of people from all over have recently started buying. Any press is good press as so many people still have not even heard of bitcoins. As the masses start to adapt the price is going to go up.

If what you say actually happens, it probably doesn't happen very much, and it's effect would be insignificant because the amount of newly mined bitcoins is a small fraction of the entire supply.

Or how about this: the difficulty has gone up by a factor of 100 since ASICs came out and yet the price has gone up by a factor of only about 6. If difficulty has an effect on price, it certainly isn't much.

i think some of it has been coming from China looking at btcchina charts over bitstamp and gox...... some leading on bitstamp too though.

I'm surprised the price has gone up so much after the whole SR thing, I was expecting it to drop

It's because Avalon is selling new Bitcoin generating machines.

http://avalon-asics.com/

They only accept BTC as payment so this increases demand for BTC.

It happens every time Avalon auction kit, the previous $200 BTC was because of this also!

Do you really think that Avalon selling a few hundred BTC worth of miners really affects the value of BTC when the daily trading volume of BTC on exchanges is over 25,000 BTC?

Avalon ???
They have nothing to do with the recent price hike.

Baidu maybe...but not only....

so it's Baidu?

Market manipulation....
:P

It is at least in part coming from China. But it is also true that good news abounds elsewhere. A lot of upward pressure on price.

Yes, because most of the volume is miner payments, gambling, speculation and free bitcoin dust.

Avalons are made in China, there is a big demand for them over there, it is a population of 1,400,000,000 (20% Earths Population).

They are offering a money printing machine but only accept payment in the money it prints meaning you gotta buy Bitcoins!

There are good ammount of money coming in this market and it makes the bitcoin price grows

have you guys seen the btcchina charts? bubble mania! reason #1 for the current hike.

Since SR closed, it have gotten alot attention from the media, that might have given the BTC a little boost too.

It's like negative publicity only grows Bitcoin. After the bubble the price went from about 13 USD before the bubble to a minimum of 69 USD after it. But everyone was talking about the bubble in negative terms.

Chinese group of speculators enrolled in.

And they are going to dump them after they have enough profits :)

Yesterady someone posted that maybe this UP rising price is due to huge buys of bitcoins from China...
It makes sense but is there anyway to confirm the origin of transactions (continent, country..) ?

Probably no, but look at BTCChina to draw your own conclusion

China is buying up lots of Bitcoin and they are going to dump it soon..!!

Point taken, we shall see.

I personally believe they buy as long term investing opportunity, but I might be wrong