I just don't get it.

[massivebitman]

Why does the price of bitcoin keep going up???

I'm pissed now that I sold all of mine.

It's gone up nearly $8 since I jumped ship.

I think about buying back in but I keep thinking it it is a high risk, and hard to make a decent profit at this price... Could it really get into the $60+ range?

I find it hard to believe.

So seriously... What is it?

What are the factors at play here.. Help me make an informed decision.

I just can't figure this thing out.

[mintymark]

This is what I believe.

The price of bitcoin is roughly speaking determined by the number of adopters because each need to "have some" and the supply of bitcoins, apart from those mined (which is a pretty small amount these days) , is very small. In fact the supply is pretty much entirly provided by investors who hoarded since the price was lower deciding to sell when the price reaches a certain point.

The rate of new adoption is key, and heres the thing. Each person in the know has contact with others who are not, organisations etc, and the rate of expansion increases with the total usage. Its a rather vicious circle.

Over a long period of time, assuming the Bitcoin experiment does not fail in some way which we have all overlooked, then the supply increases slightly and as usage (which includes investers) increases the demand is going to increase massively.

This is the reason why I belive the price of bitcoin has increased, and there is presure for it to continue to do so. There is also anxiety about the new year high: people have to get used to the price and once this happens I predict the price will once more rise substantially.

Another way to look at this is that theres a circle with Bitcoin users outside and non-users outside. The "space" outside is massively bigger than the space inside, and the circumference of the circle is where the discussions about adopting and using bitcoin occur. Gradually the circle gets bigger. As it does so the size of the cicumference gets bigger and so the rate of new adoptors gets bigger. The mining subsidy will only go down. The only place new coinsd can come from is sellers and the only way to get people to sell is to raise the price. So that is what happens.

Thats my explanation.

[Zangelbert Bingledack]

1) Either Bitcoin goes to $0 in a few years or to very high levels like $10,000/$100,000+.

2) Supposing it's going to the high figures, it logically must traverse a path from its current price of $35 to those high numbers. That path must be very steep on average, or it won't make it there in a few years. The slower it goes right now the faster it will have to eventually go, and it would certainly not be surprising in this scenario if it continued growing rapidly right now.

3) Therefore, if you think there is a decent chance Bitcoin could be successful, there is no cause to be surprised if it continues growing at breaknecks speeds for several years.

[blackreplica]

Are you in this for a quick punt?

If so, give yourself a pat on the back (you probably made money) and don't look at the price anymore

But the case differs if you are actually bullish about bitcoin in the long term and sold because you wanted to make money on a trade

IMO trying to catch the peak (provided you are long term bullish) is just risky business.

The fact of the matter is, if you truly believe one day everyone will have heard of, or will use, bitcoin, then you cashed out way too early. There's too much potential demand relative to supply, for now at least.

Whether or not to buy in now simply depends on your bitcoin price expectation on your investment horizon.

[piramida]

logically speaking, nobody has a slightest idea what bitcoin price should be. there are a number of theories to base informed decision at, but they vary from $2 to hundreds thousands. so the only way to know what the price is, is to look at the market price. right now, it's going up at some level, it will stop and go down for several months. then back up again. etc.

see, amazingly helpful but really, bitcoin is not tied to any external factors, so it can cost anything at any moment. so you either believe in it and hold, or you don't and sell. easy.

[muyuu]

Don't suffer because these grapes are a bit sour

Now seriously, you made a profit so you are in a better position than 99% of the humanity who never had any.

You speculated and came out with more than you came in, that is a good result any way you look at it. Any profit could always had been better. You could have invested more or chose a slightly better moment to buy or sell. It's just the way it is.

[KTE]

If you don't get it after reading this thread, then you're better off staying off the boat.

[Frequency]

The only thing that really mathers is that btc fulfills an hugh need worldwide on the internet and therefore sells itself, easy...!!!

Every succesfull bussines fulfills needs, so find out the need and start fulfilling them..!!!  

 

( damn i wish i had some asics on the shelfs they fulfill some needs)

Srry for my poor English

[phatsphere]

well, looking at the last 1 1/2 years, you have a fairly good chance to buy back at a lower level. but on the other hand, the past might never repeat again!
if you look at the logarithmic chart of the last two years, you can draw a nice baseline at the bottoms. this one is just approaching 20 (above the last solid support at ~13) … the latest increase might be a sign of an increasing adoption rate, and this behavior is nonlinear. if more and more know about it and tell even more, you might get this: http://en.wikipedia.org/wiki/Percolation_theory
but nobody knows this and it could all be a temporary systematic trend too.

[hardcore-fs]

1) Either Bitcoin goes to $0 in a few years or to very high levels like $10,000/$100,000+.

2) Supposing it's going to the high figures, it logically must traverse a path from its current price of $35 to those high numbers. That path must be very steep on average, or it won't make it there in a few years. The slower it goes right now the faster it will have to eventually go, and it would certainly not be surprising in this scenario if it continued growing rapidly right now.

3) Therefore, if you think there is a decent chance Bitcoin could be successful, there is no cause to be surprised if it continues growing at breaknecks speeds for several years.

This is called the 'monte carlo fallacy', if it's black it must be red.......soon.

[Piper67]

1) Either Bitcoin goes to $0 in a few years or to very high levels like $10,000/$100,000+.

2) Supposing it's going to the high figures, it logically must traverse a path from its current price of $35 to those high numbers. That path must be very steep on average, or it won't make it there in a few years. The slower it goes right now the faster it will have to eventually go, and it would certainly not be surprising in this scenario if it continued growing rapidly right now.

3) Therefore, if you think there is a decent chance Bitcoin could be successful, there is no cause to be surprised if it continues growing at breaknecks speeds for several years.

This is called the 'monte carlo fallacy', if it's black it must be red.......soon.

Uh.. No.

[Zangelbert Bingledack]

This is called the 'monte carlo fallacy', if it's black it must be red.......soon.

Read again.

[cypherdoc]

Welcome to the Bull Market!

As much as some of the bears say they are perfectly happy having made a thousand percent profit after having sold at 13, I'm here to tell you that they are kicking themselves in the pants right now.

And you know what?   They will be a significant part of the continued ramp once they scramble to get back on the train.

[xxjs]

Why does the price of bitcoin keep going up???

I'm pissed now that I sold all of mine.

It's gone up nearly $8 since I jumped ship.

I think about buying back in but I keep thinking it it is a high risk, and hard to make a decent profit at this price... Could it really get into the $60+ range?

I find it hard to believe.

So seriously... What is it?

What are the factors at play here.. Help me make an informed decision.

I just can't figure this thing out.

You can not compare to a company. Bitcoin is not a company, and coins multiplied by price per coin is not capital.

It is money.

There is always enough money.

Price of money is the inverse of all other prices. So if a blue barrel of oil is 2 BTC, price of bitcoin is 1 bbl/2.

Price of money is defined by demand and supply. Supply is what people want to sell for (number of coins at XX USD). Demand is what people want to buy for (number of coins at XX USD). Number of existing coins is not supply (but of course sellers and buyers take note of it). Want or need is not demand - what offer you bring to the market is demand.

Number of users and their holding preferences, expressed with X coins at Y price on the market, is demand.

We think demand can grow with new users.

People want to hold bitcoins a) because it is safe, no inevitable devaluation, and b) because it is or will be useful.

[lebing]

https://bitcointalk.org/index.php?topic=143973.0

[cbeast]

Bitcoin is a fundamental new technology. It was engineered specifically to drive a global economy on the internet. Thinking that it will fail is believing that the internet will fail. It is possible, but unlikely. If you want to understand the potential (or inevitable) adoption of Bitcoin, then look at the adoption of the internet. As the internet is a force of freedom of speech, so will Bitcoin be the force of freedom of exchange.

[shkiser]

I dont forsee the btc to slow down anytime soon. Since I have been involved (NOV 2012) Ive seen it go from about $11 to $35 where it is today.. That is 4 months, and it has tripled! Never seen anything like this, and It is absolutely exciting! I think it is still a very safe investment today, and as time goes on it will only improve. Its a no brainer. It is filling a huge void, that was never there before. If you understand who is using, why they are using, how many more will adopt it, its very easy to see there is no stopping this train.. I am still buying, and plan to keep buying. Depending how long it takes to hit $40, I will most likely continue to buy up to $50.

[Cluster2k]

Bitcoin has recently garnered increased attention from alternative media:

http://www.dailyreckoning.com.au/boycott-bitcoin/2013/03/04/

http://www.dailyreckoning.com.au/bitcoin-get-rich-or-die-mining/2013/02/27/

Why is bitcoin currently going up at a rapid rate?  Because people are buying hoping to sell to someone at a higher price.  Why is the price going higher?  Because people are hoping to sell to someone else to make a quick profit.  Once the supply of new entrants ebbs or stops the earlier adopters cash in, plunging the market.  We saw this in 2011.  Will we see it again in 2013?  It's only obvious in hindsight.

A 90%+ drop was possible within six months.  History does not repeat, but it rhymes.

[molecular]

I dont forsee the btc to slow down anytime soon. Since I have been involved (NOV 2012) Ive seen it go from about $11 to $35 where it is today.. That is 4 months, and it has tripled!

Don't get me wrong, I'm all bullish on bitcoin, but the bolded part is exactly what I thought in summer '11.

The fundamentals are much better, though and this time it's not some gamer-geeks jumping on, but "real" people. They are here to stay because bitcoin is useful and its inflation known.

[creativex]

The way the exchange rate has increased is different as well. The rally has been actively cooled with fake ask walls on a number of occasions.