Monthly average USD/bitcoin price & trend

[piramida]

The data is good enough, taking noise into consideration have never added any reliability to the outcome; trades pre-gox are mostly noise.

[BitChick]

Taking just the data from the last two years is obvious cherry-picking (I have yet to see a less brain-damaged justification than "when exchanges started working properly"). How about taking all data and fitting it to a super-exponential curve? If fitness were better than the exponential trend presented in this thread the theory would be confirmed in my opinion (and the rate of growth would surely be lower than that "$100000 before autumn" nonsense).

I would like to see this too. The problem is that very early measuring points are likely to be really inaccurate.

+1. Howbout if somebody older than me would actually take the effort to research into the early days. I was not here then. I think a few hours of actual work (instead of posting) would take us far!

I would think the data in the early days would be less relevant anyways?  As time goes on the data should become more reliable instead of less reliable, just as the success of Bitcoin is now more likely than it was a year ago let's say?

But for someone out there that enjoys punching numbers (not me!) please go ahead.

[Valerian77]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

If each exchange doubles its capacity in time x and the number of exchanges also doubles in time x, it seems possible.

Possible - but keep in mind that there are many completely unpredictable processes.

Firstly the legal development cannot stop Bitcoin as a whole but it may have a tremendous effect on the price curve. Recent actions in China and India have shown what can happen.

Secondly underlying not identified risks may occur and implicate the development. Eg. information about lost coins which will eventually break down the value of Bitcoin at all. There was a very informative presentation on this point: http://tinyurl.com/lfzlhvp

Thirdly one of the altcoins or some unforseen new technology inventions could take over a bigger part of the market.

For now it looks like the curve will continue its surge but on the other side a breakdown could also stop Bitcoins success. Bitcoin is not that long in the market that it would survive every drawback like gold.


Apart from these points the very nice diagram does not look like the green log°log for me. Maybe it is log°log but with changed parameters - it should be more close to the red log line.

[BitChick]

http://finance.fortune.cnn.com/2013/12/31/fortress-is-forming-a-bitcoin-fund/

This should keep the super exponential growth humming along nicely next year!

[Voodah]

I don't think the pre-2011 data is really that relevant, if at all.

How is the behavior of a very small bartering ecosystem ( I don't even know if we should call pre-2011 a market ) supposed to provide us valuable data for today's market?

I feel like the pre-2011 stuff is historically nice data to have, but it might just be noise on the formulas.

[bitrider]

That log-log chart is pretty amazing. While I doubt that we have the data to either confirm or deny this trend line, the near target seems completely unattainable to me at the moment. The log chart seems a reasonable pace within which to build out the necessary infrastructure for the next phases of adoption. But I have no illusions that I know what will truly happen. Continual mind blowing is the name of this game.

The one element of the log-log chart that does resonate intuitively to me (makes me suspect that the red log trend may be conservative), is that in each explosive drive upward BTC has achieved - in essentially one big push - an increase of 1 order of magnitude. ie. 1 >10>100>1000... so it does not seem unbelievable that the same could happen from 1000>10000. So do we wait down below 1000 for the next year and explode up? Could be. But I find that very hard imagine too. And of course the past may not predict....

Adoption comments and random thoughts..

As to the adoption issue...my own small universe of friends who are not technically or financially inclined, have just now started to get serious about pressuring me for information about how to get a piece. These people intuitively get what is happening, without really needing or wanting to completely understand it. They just want to buy (at a good price) before the next explosion. At this point, I send them all to Coinbase, which the no-brainer here in the US. The feedback has been unanimously tremendous in terms of their experience with the functionality and simplicity. They all come away more impressed and confident in bitcoin. The truth is, there is no where else I would send anybody like that right now. I can only assume that coinbase in going to dominate in the next year. Can they handle all the growth that is coming? Are others at that professional level coming on line?

And then Wall Street money coming in will not require the level of consumer friendly apps etc , so we may accept/integrate this new money with little strain to the existing infrastructure. With perhaps more accessible public adoption and payment options in 2015.

It has been an amazing year. So grateful to be on this ride - on so many levels. And next year at this time we will have a lot more data to play with!

Thanks and happy new year to all.

[Pruden]

Taking just the data from the last two years is obvious cherry-picking (I have yet to see a less brain-damaged justification than "when exchanges started working properly"). How about taking all data and fitting it to a super-exponential curve? If fitness were better than the exponential trend presented in this thread the theory would be confirmed in my opinion (and the rate of growth would surely be lower than that "$100000 before autumn" nonsense).

I would like to see this too. The problem is that very early measuring points are likely to be really inaccurate.

+1. Howbout if somebody older than me would actually take the effort to research into the early days. I was not here then. I think a few hours of actual work (instead of posting) would take us far!

In my opinion, only data from early 2011 onwards is necessary. My point is that any price trend model absolutely MUST include the 2011 bubble. Starting from its post-peak bottom is cherry-picking.

[cbeast]

The standard S-curve should still apply. Bitcoin is its own worst enemy right now. Bitcoin in its current form acts as a payment protocol and a virtual commodity. This wild speculative pricing is based on it being a commodity. Its qualities as a payment protocol works against the price as you don't need any more than you use to send if you have a better store of value. Bitcoin needs further development through things like colored coins to make it act as a truly valuable negotiable instrument. Then you'll be able to factor in derivatives and competing Bitcoin-based currencies that overwhelms the suppression factor as merely a payment protocol. Then we can begin to see factorial growth.

[exocytosis]

But it's not simply that "It can't be", but rather the general observation that infrastructure wise, we're not really there.

Infrastructure implementation also increases exponentially. Expect new exchanges to pop up at an ever more rapid pace, while existing exchanges also grow more or less exponentially. They'll buy the needed servers and hire the needed people to continue supporting this growth.

[Equilux]

I'm curious to see where the next point on the graph in the OP will end up!

[Ducky1]

Taking just the data from the last two years is obvious cherry-picking (I have yet to see a less brain-damaged justification than "when exchanges started working properly"). How about taking all data and fitting it to a super-exponential curve? If fitness were better than the exponential trend presented in this thread the theory would be confirmed in my opinion (and the rate of growth would surely be lower than that "$100000 before autumn" nonsense).

I would like to see this too. The problem is that very early measuring points are likely to be really inaccurate.

+1. Howbout if somebody older than me would actually take the effort to research into the early days. I was not here then. I think a few hours of actual work (instead of posting) would take us far!

In my opinion, only data from early 2011 onwards is necessary. My point is that any price trend model absolutely MUST include the 2011 bubble. Starting from its post-peak bottom is cherry-picking.

Yes, I agree that its cherry-picking if there can be found no good reason to start at this point (or later). So is there any good reason to exclude the 2011 bubble? I'm speculating that the first bubble was purely speculation only. Bitcoin where not actually used for trade (at any reasonable amount anyway) before and during this bubble, while after September 2011 trade started to become a more important part when Silk road started (http://historyofbitcoin.org). So basically after the 2011 bubble the market became more "sensible", and the growth after this point is no longer pure speculation, but also mirrors the use of bitcoin as a currency. Shoot me down  now please.. 

[dnaleor]

My alternative approach - log vs log(log) from 01.11.2011 to present. Conclusion: The log-log model seems to better fit the data than the linear-log model, and according to this model we are actually slightly under the trend line. Comments?

I love this kind of charts

[Ducky1]

I just realized that gbianchi has an explanation from his analysis of the blockchain as to what changed during the middle to late part of 2011. Go read https://bitcointalk.org/index.php?topic=394221.0 . Basically the social classes of bitcoin holders where established in this period, and remains more or less unchanged to this date.

[bitrider]

Yup. Just read through his work. Excellent adjunct to this thread. Very cool.

[BitchicksHusband]

I'm so tired of the extrapolation argument (OMG, bitcoin will be worth 1000 trillion in 2017!!! Ha ha ha.).  YES, we all understand that bitcoin has a top and will slow down when it approaches that top (hence why it's called an S curve and not a J curve).

But the questions remain:

Where is the top?
How fast does it get there?

[NewLiberty]

I'm so tired of the extrapolation argument (OMG, bitcoin will be worth 1000 trillion in 2017!!! Ha ha ha.).  YES, we all understand that bitcoin has a top and will slow down when it approaches that top (hence why it's called an S curve and not a J curve).

But the questions remain:

Where is the top?
How fast does it get there?

What happens when a denominator approaches zero?

[rpietila]

I'm so tired of the extrapolation argument (OMG, bitcoin will be worth 1000 trillion in 2017!!! Ha ha ha.).  YES, we all understand that bitcoin has a top and will slow down when it approaches that top (hence why it's called an S curve and not a J curve).

But the questions remain:

Where is the top?

Here.

How fast does it get there?

It will continue to increase at about the established rate (double every 99 days on average) until we are there. So if we estimate that Bitcoin will totally replace the current system and reach 100 trillion market cap, it is trending to happen about October 2017. Considering that there will likely be a huge readjustment before universal adoption, the actual long term value (or higher) will be reached ahead of the trend. Even now we are ahead of the trend!

[rpietila]

Update coming soon!

I will base the updates in the more accurate trendline which is based on daily figures.

[kehtolo]

Cool thread, I'm posting here for bookmarking purposes.

[keystroke]

Eager to see an update soon. Subscribing! Let 2014 be the year of the coin. And 2015, 2016...