My take on it
1. BTC first to market, first to adoption, first to acceptance (yes adoption and acceptance are different
).
2. Majority of BTC is still held by few hands/large mining operations/equipment manufactures compared to the amount held by the average person (us).
3. Large mining operations have set over head in equipment, maintenance, electricity that have to be met, they will not sell at a loss. Since these types of opperations control the majority of the BTC along with hardware sellers and select other, then they essentially control the market. They will hold BTC until they get the price that is needed to recoup costs, keep the farm mining, replace existing equipment ect. When they hold, supply goes down, as supply goes down, demand/price goes up.
4. As demand goes up because BTC is first to wider spread acceptance, (ie; Those who know nothing of "crypto" currency have at least heard the term Bitcoin), Demand for faster ASICs goes up because more people want to mine to get a piece of the pie, leading to more efficient miners, leading to new equipment having to be purchased to keep up with difficulty adjustment, leading to more expenditure of CASH, leading to higher prices of BTC needed to repay those expenditures. It's a circle.....
Hypothetically, if all mining were to stop today, and no other BTC could be mined, then there would be no need for the insane amount of hashing power we have today. If adoption by merchants, ect stayed where it is today, would BTC hold steady or would it drop?
If usage, acceptance, and dissemination (BTC getting into many more hands) occur, then it should continue to rise based on the way any other traditional currency does. Right now BTC trades a lot like a commodity on an exchange. Commodity prices vary greatly based on production costs. Right now production of BTC drives a lot of the market.
