 |
March 16, 2013, 01:40:20 AM |
|
I'm predicting $500 by March 2014. Here's why.
The positive press will continue for a while. We're not yet important enough to warrant serious attacks from the overlords. First they ignore you, then they laugh at you, then they attack you, then you win. I doubt we'll switch from the "ignore" phase to the "ridicule" phase in the next 12 months.
Bitcoin will prove to be relatively stable in price primarily because the super rich cannot SHORT it and crush the price. To sell Bitcoin, you have to have some! To sell a bunch, you have to first acquire a bunch, which will drive up the price and create more positive press. Unless they find a bug to exploit, they cannot crash Bitcoin without building it way up first. And if they do that, they might find that it's too big for them to crush.
I believe most Bitcoins are currently held by "true believers" who are unlikely to dump them, even if the price starts to slide. And I know there are lots of people who will buy more if they see lower prices.
The CoinLab/Mt.Gox deal will make it easier for people in the U.S. to purchase Bitcoin with minimal fees and much less hassle. (If that deal turns out to be a bust, someone else will make it happen.) As it gets easier for people all over the world to purchase Bitcoin, each piece of news will bring in more long-term investors.
More merchants will start accepting Bitcoin because there's no downside. The fees are lower, there are no chargebacks, your customers see that you offer more choices for them, and some payment processors give a price guarantee, where you are guaranteed to get the list price in your home currency.
The ridiculously small number of Bitcoins, only 1 for every 700 people on Earth, is genius. It already looks like BTC is 50 times healthier than the USD, and steadily climbing. It's like Berkshire Hathaway. People are impressed by the price. If there were 10000 times as many shares, the value would be the same, but the price would be psychologically less impressive. Some day people will be exclaiming that Bitcoin is obviously a fabulous investment because it has gone from under $1 to over $1000, and is still climbing. If it had made the same move, percentage-wise, from $0.01 to $10, it would look like a worthless penny stock.
So the next 12 months should bring mostly positive press, an increase in the number of people wanting to get in while it's still relatively low, and a fairly steady increase in price as the law of supply and demand works its inevitable magic.
That's my prediction.
|
