Why bitcoin will appreciate forever

[Coinminer11]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

I agree. I see this as an uptrend and not a bubble imho. The $1100 was Mt.Gox who caused this I think (please someone correct me if I am wrong)

[1714155450]

1714155450

[RealBitcoin]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

I agree. I see this as an uptrend and not a bubble imho. The $1100 was Mt.Gox who caused this I think (please someone correct me if I am wrong)

Possible, but I`m not sure if this is "it". You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

[Laketear]

You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The price rises so fast. It could be a bubble.

The world economy is not too bad. If 1% of Wall Street money comes into bitcoin, the price will be much higher.

[pereira4]

The current trend of bitcoin is that is is appreciating. The big bubbles and bursts only affect the short term trends.

Surely it will burst soon or later because at one shot prices went up more than 50% so I think there will be a correction soon.

You can't call this latest rise a bubble. Yes, we have gained nearly 50% but this ain't a bubble, especially if we know that Bitcoin was in a two year old bear trend and that the highest price was over $1,100 at the moment.

Now that rise to a $1,100 was a bubble. I would rather call current rise a recovery!

I agree. I see this as an uptrend and not a bubble imho. The $1100 was Mt.Gox who caused this I think (please someone correct me if I am wrong)

Possible, but I`m not sure if this is "it". You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The "it" bubble happened in a matter of days. It is simply impossible to try to predict a massive panic buying rally. I am all for it as long as the correction is not bad enough that it leaves us with the same (or worse) floor. I think this will not be teh case anymore because in near 2016 Bitcoin is way more consolidated than it was back then in the dodgy MTGox days. Once we reach 1K again people is not going to wait for 300 to get in hard, the correction will be small.

[Amph]

You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The price rises so fast. It could be a bubble.

The world economy is not too bad. If 1% of Wall Street money comes into bitcoin, the price will be much higher.

it's always a bubble, i never seen a price increase that then does not go boom, and return even partially to the main, you should always expect a dump after a pump, no matter the entity of the pump

[RealBitcoin]

You can see the price increase is very sharp, so it could be a bubble.

However the global economy is so fucked up,that it could not be as well. It can be just a late reaction of traders worldwide that discover that bitcoin is the real deal.

The price rises so fast. It could be a bubble.

The world economy is not too bad. If 1% of Wall Street money comes into bitcoin, the price will be much higher.

it's always a bubble, i never seen a price increase that then does not go boom, and return even partially to the main, you should always expect a dump after a pump, no matter the entity of the pump

Not always, it can be a small retracement of 1-2% and then resume the uptrend.

I thnink this is waht the price is doing now, the increase retraced a few € today, but it could go back up later.

[1990BEARS]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

i do not think this will ever be possible. bitcoin have dev team better than any altcoin and is basis for most altcoins...it also achieve the best more than any altcoin can achieve without taking page from it book.
no altcoin that is same as bitcoin will beat bitcoin.

[Sir_lagsalot]

I've bought 10 bitcoins and have done this trading strategy. Although the whole bitcoin community isn't doing this, since bitcoin is on quite an uptrend, I can make alot. The problem is that if bitcoin suddenly drops, I lose everything. I guess that happens if you don't buy and sell too, I guess. It hurts everyone.

I do believe bitcoin will appreciate greatly, but some of my friends call me a lemming. If the community wants to hodl, I hodl. If they don't, I don't. But that's how I was late to bitcoin.

[RealBitcoin]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

[nerFohanzo]

What if an alt-coin reaches the same adoption level as Bitcoin? Wouldn't that be seen as effectively increasing the total number of available coins, therefore devaluing BTC?

i do not think this will ever be possible. bitcoin have dev team better than any altcoin and is basis for most altcoins...it also achieve the best more than any altcoin can achieve without taking page from it book.
no altcoin that is same as bitcoin will beat bitcoin.

Exactly no other crypto currency can beat bitcoin as bitcoins is more popular then any other coins and people have more faith in bitcoins, and the adoption level of bitcoins is more as compared to altcoins, and investing in altcoins can be a risky decision to make and I generally prefer to convert my bitcoins to fiat currency which is very cheap time saving and reliable.

[Laketear]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

$150 will only happen when there is a disaster. The medium bottom is $250. If the price stays above $250 for another 3 month, the price could go to $600.

[n2004al]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

$150 will only happen when there is a disaster. The medium bottom is $250. If the price stays above $250 for another 3 month, the price could go to $600.

No one can know how it will be the price of bitcoin the next days or months. Maybe even after a year. All the predictions made have no basis because there are not data as it is needed to make reasonable prevision of its price in the future. There is only two secure and irreversible data: the limit of number of coins (bitcoins) entered in market in time and the limit of overall number of coins (bitcoins). These data theoretically testify and argues the high price of it in the times to come. But when or where are only suppositions without to much basis. No one can know the real demand (and its rate of increase) for bitcoin because no one can know the spread and the accept of bitcoin by the people in real time. There are not any institution which can measure such kind of data. Without this kind of data all the suppositions remain only words.

To not mention here other factors (such are the political ones) which can affect not less this price.

[johnyj]

I am not very convinced if Bitcoin will appreciate forever for the simple fact that it may be substituted with better technology (coin) in say 10 years from here. That would mean most of the people who now use Bitcoin will slowly move to the new coin. It has not happened yet with altcoins as most of the projects were following bitcoin too closely. But you can't rule it out that we will soon see something capable of dethroning bitcoin and thus start to lose its value.

This is not very likely to happen. Software only provide utility, so users lose nothing by abandoning one and switch to another one with better utility. But bitcoin is capital. Once everyone have invested so much in this capital, they will incur a huge loss if they leave it, so it is more likely they will continuously injecting new investment to make sure their investment not losing value

Besides, there are other reasons prevent an alt-coin from replacing bitcoin:
Alt-coin is inflation, which against the basic rule of bitcoin
Any coin must be time tested to have enough recognition, and by the time a new coin get recognized, bitcoin's popularity is even higher, new coins can not break the barrier of time

[johnyj]

No one can know how it will be the price of bitcoin the next days or months. Maybe even after a year. All the predictions made have no basis because there are not data as it is needed to make reasonable prevision of its price in the future. There is only two secure and irreversible data: the limit of number of coins (bitcoins) entered in market in time and the limit of overall number of coins (bitcoins). These data theoretically testify and argues the high price of it in the times to come. But when or where are only suppositions without to much basis. No one can know the real demand (and its rate of increase) for bitcoin because no one can know the spread and the accept of bitcoin by the people in real time. There are not any institution which can measure such kind of data. Without this kind of data all the suppositions remain only words.

To not mention here other factors (such are the political ones) which can affect not less this price.

Simply put, since most of the investor money always first go to mining (the lowest cost of acquiring bitcoin), if the mining difficulty continuously climb, it means there is new capital inflow, price will get higher. Mining cost basically works as a baseline for bitcoin value, similar to other commodity

The demand however is not easy to evaluate, but you can guess, if the demand get lower, the first thing you will notice is that the mining difficulty going down, means smart capitals are not interested in acquiring bitcoin anymore

And we just had several difficulty jump, so I guess the demand is still rising fast 

[MyBTT]

Joe had $1000, he bought 100 bitcoins at $10. After one year, he sold them for $1100 at $11. He spent $100 and reinvested the rest $1000 back into bitcoin

Only 10 bitcoins were actually sold from him the second year, and 9 bitcoins will be sold from him the year after, etc... He will be able to spend $100 year after year, like a 10% interest earned forever

So, if everyone sell 10% of their purchased coins per year, and the number of coins per day is decreasing by 16% per year (50% every 4 years), the coin supply will still derease by 6% per year

This means, with a good cash out strategy (sell 10% of coins each year), people could keep making profit while maintain the deflation trend of bitcoin, thus price will appreciate continuously, at least 6% per year

In above case, Joe only buy once and keep cashing out year after year, so averagely each year there should be 1.04x more people to buy bitcoins (if every one spend only $1000 like Joe), in order to keep the 10% price appreciation (together with a 6% decrease in supply)

If the price appreciation speed is higher, say 100% per year, Joe can still keep this 10% cash out strategy, but the second year he will have much higher amount to spend, and that will also require 2x number of new joiner to support the higher bitcoin price

What if Joe decided to purchase $1000 worth of coins each year until he retire after 30 years? Same, but price appreciation speed will be much higher during those 30 years because of constant buying support and no sell pressure from him. He would have accumulated so much coins during those 30 years, and when he start to spend 10% of them, he will cause a large increase in coin supply, but his profit will be bigger since he reinvested all the returns back into bitcoin during those years

No matter one year or 30 years investment period, after Joe quit, if there is another Joe start to invest in bitcoin, the demand for bitcoin will not reduce, just like a pension fund, Joe's children and grand children will join it one after another, so long term wise this is sustainable

With many different investors that holding from 1 year to 30 years, and different start time, the sell pressure will be more evenly distributed, if all of them hold a strategy of cashing out no more than 10% each year, then they will all benefit from the investment

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

If bitcoin's supply can be arbitrarily changed like fiat money, then all of these won't work at all

(Edit: added the simulation of daily coin supply for 1, 2 and 4 years investing period)

Good theory. I wonder if it is practically true though.

[johnyj]

Good theory. I wonder if it is practically true though.

I just had a thought today: If everyone read this theory and do exactly as it described voluntarily, e.g. long term holding and slowly cashing out, then the anticipated result will be guaranteed, it does not take more than ground school mathematics skill to verify this theory

What is this means? If every participants agree to join this pre-defined investment plan, then they can have a good retirement scheme or long term saving plan which defeat the return of all the retirement/mutal fund in the world. Bitcoin is just a tool to make this plan happen, it is user's behavior drive it to success

Currently this behavior is half unconscious, people have a feeling that holding it long term will be good since it is deflative, but they can not tell exactly why

[Blue_Tiger73]

Joe had $1000, he bought 100 bitcoins at $10. After one year, he sold them for $1100 at $11. He spent $100 and reinvested the rest $1000 back into bitcoin

Only 10 bitcoins were actually sold from him the second year, and 9 bitcoins will be sold from him the year after, etc... He will be able to spend $100 year after year, like a 10% interest earned forever

So, if everyone sell 10% of their purchased coins per year, and the number of coins per day is decreasing by 16% per year (50% every 4 years), the coin supply will still derease by 6% per year

This means, with a good cash out strategy (sell 10% of coins each year), people could keep making profit while maintain the deflation trend of bitcoin, thus price will appreciate continuously, at least 6% per year

In above case, Joe only buy once and keep cashing out year after year, so averagely each year there should be 1.04x more people to buy bitcoins (if every one spend only $1000 like Joe), in order to keep the 10% price appreciation (together with a 6% decrease in supply)

If the price appreciation speed is higher, say 100% per year, Joe can still keep this 10% cash out strategy, but the second year he will have much higher amount to spend, and that will also require 2x number of new joiner to support the higher bitcoin price

What if Joe decided to purchase $1000 worth of coins each year until he retire after 30 years? Same, but price appreciation speed will be much higher during those 30 years because of constant buying support and no sell pressure from him. He would have accumulated so much coins during those 30 years, and when he start to spend 10% of them, he will cause a large increase in coin supply, but his profit will be bigger since he reinvested all the returns back into bitcoin during those years

No matter one year or 30 years investment period, after Joe quit, if there is another Joe start to invest in bitcoin, the demand for bitcoin will not reduce, just like a pension fund, Joe's children and grand children will join it one after another, so long term wise this is sustainable

With many different investors that holding from 1 year to 30 years, and different start time, the sell pressure will be more evenly distributed, if all of them hold a strategy of cashing out no more than 10% each year, then they will all benefit from the investment

So, it is easy to see, even the underlying bitcoin economy does not grow at all, just because bitcoin's deflation nature, it will become a perfect medium for saving and investment

If bitcoin's supply can be arbitrarily changed like fiat money, then all of these won't work at all

(Edit: added the simulation of daily coin supply for 1, 2 and 4 years investing period)

There are too many rules to make sure that Bitcoin always appreciates. So pretty much this will never happen as not everyone is going to do what you stated.

[avw1982]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

As per speculation There less opportunity to crash to below 200$. and Price will not constant It will be zigzag as it. But we can see and expect good market rate for bitcoin in the year 2016 and ahead. because increasing the adoption rate of bitcoin.

[LMGTFY]

There are too many rules to make sure that Bitcoin always appreciates. So pretty much this will never happen as not everyone is going to do what you stated.

But the beauty of it is that those rules are "baked into" the system - supply falls over time, regardless of the investment strategy Joe adopts. Note that whatever approach Joe takes, the graph still shows the daily supply of BTC decreasing over time.

[sishendaoye]

Even if the price will make a correction, I dont think we will crash back to 150$ again ,that would be absurd.

Probably a retracement back around the 260$ levels and then probably take off again.

As per speculation There less opportunity to crash to below 200$. and Price will not constant It will be zigzag as it. But we can see and expect good market rate for bitcoin in the year 2016 and ahead. because increasing the adoption rate of bitcoin.

Yeah lets just hope that in 2016 bicoin will just make more people happy and that more people will use it and more company's will adopt bitcoin. I wish that it 2016 there will be more atm for bitcoin, but I think is to expensive to build it.