From what I can see, Bitcoin exchanges have 5 fundamental groups of investors. In order of trade volume :
- New Money looking for BTC exposure (speculation)
- Old Money (miners) looking to get out at a good price
- New BTC miners looking sell to hedge their hardware costs
- Merchants selling their BTC to cover real world costs
- New Money looking for BTC to buy merchants' products
One factor which concerns me is the number of old-time miners with large bitcoin holdings. Approx 7.2mm bitcoin had been mined by the start of 2011 , and the total trade volume on MtGox since then has been very approximately 1mm BTC (20mm USD / $20) . If the old-time miners all got out at the same time (eg. fear due to the price crashing 75%), there would be a rout.
Thoughts? Anyone have trade volume estimates on the other groups?