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July 28, 2011, 07:18:39 PM |
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Bitcoin is really weird. For an internet currency, the time frames are shockingly long. Twenty minutes for confirmations, etc. When the market was going through the roof, it was (I think) because of the 3-5 day delay of new people getting in. We saw the price climb every day and had to pay much more than we thought when we initiated our deposits. We were so afraid of missing out altogether, that we bought too high. Some even borrowed money to get in, and some of those have to sella little to cover the interest payments on the loan.
This downward pressure is compounded by miners who started buying and building their mining rigs when the price was high and climbing. Now they have to pay for their gear and electric bills, so they are forced to sell too low. Some even foolishly quit their day jobs and are even more desperate.
Both groups made decisions based on assumptions about the future, extrapolating trends that couldn't possibly continue.
The upward pressure comes from everyone who sees the present and future benefits of Bitcoin and who is also able and willing to utilize that knowledge.
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