This price surge is only a short speculation bubble.

[timk225]

For all those of you peeing your pants over BTC reaching $568 today, I say relax.  This is only a speculator investment bubble that will crash even faster than it rose.

Having said that, I sure do wish I had bought a few thousand bucks worth of BTC back when it was $60-$70 a few months ago.  But then again, at that time I thought it might barely get back up to $120, and now I could have nearly ten times'ed my money.  Damn.

[-ck]

This looks like a job for Captain Hindsight and his Retrospectoscope!

[Lonechaos]

THat's what everyone says when there is a new high.

[LightningBlade]

I heard that when BTC is at 200 and again at 300 and again at 400...

[rudyo]

For all those of you peeing your pants over BTC reaching $568 today, I say relax.  This is only a speculator investment bubble that will crash even faster than it rose.

Having said that, I sure do wish I had bought a few thousand bucks worth of BTC back when it was $60-$70 a few months ago.  But then again, at that time I thought it might barely get back up to $120, and now I could have nearly ten times'ed my money.  Damn.

Your thoughts and ideas are certainly possible, but the opposite is also entirely possible (and IMHO, more likely). The last year there have only been a few times when it retreated significantly, but each was short lived.

http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgCzm1g10zm2g25

I also wonder what happens to an item that has first, a finite supply (21 million total) and second, becomes incrementally more difficult to produce as time goes on (mining)?   I can't help but believe the price will increase as we approach these two facts.

As the saying goes "The trend is your friend, until it isn't"   :-)

[digitalindustry]

This looks like a job for Captain Hindsight and his Retrospectoscope!

Gold price dead ahead Captain !  Then looks like stormy waters .

[Operatr]

Bitcoin is not a bubble, because Bitcoin is not simply an asset like gold or other kind of purely speculative financial instrument like derivatives and stocks. It can enter a state of mini-speculation bubbles that will correct naturally, and this is what we are indeed seeing.

Anyone calling "tulip mania" clearly does not understand the fundamentals of the Bitcoin protocol. This is an entirely new financial system from end to end that is taking root in the real world in a viral way, moving out of the garage and into serious business.

April's crash was largely due to the simple fact that MT.Gox, carrying 80% of all BTC trade ON EARTH collapsed under the weight of so much new trade traffic, naturally causing a mass desertion when it came back online. Would you keep your fortune in there after that? The surge was largely speculative, sure, but it wasn't the speculation that crashed the price, Gox and its incompetence did. THe Bitcoin sphere has grown a lot since then, many new exchanges now larger than Mt.Gox, new payment systems, mass media exposure that only increases with the market price, and so on. This is a very different situation now. It will never crash on that level ever again I think (though never say never). You can see on the charts that the volumes around April are now substantially higher than the averages now on Mt.Gox as it is no longer the only big exchange. Mt.Gox started lagging horrendously 2 weeks ago, to which the rest of the worlds exchanges shrugged and moved on.

I also wonder what happens to an item that has first, a finite supply (21 million total) and second, becomes incrementally more difficult to produce as time goes on (mining)?   I can't help but believe the price will increase as we approach these two facts.

As the saying goes "The trend is your friend, until it isn't"   :-)

Bitcoins total coin supply may be 21 Million, but each coin's wealth can be infinitely divided by simply moving the decimal over a place, which is already built into the protocol if needed someday.  Really "1 Bitcoin" is a formality, as each is really 100 Million satoshis. The entire Bitcoin economy could theoretically still function even if there was just 1 coin left. Not to say that is practical, but possible. One cannot think of Bitcoin in a fiat mindset, it works very differently than fiat money does.

[timk225]

I think BitCoin's price could rise a lot or crash a lot because it really isn't tied to anything, at least not yet.  A dollar has a value relative to the pound or yen or Canadian dollar or whatever other money, but for now, a BTC is pretty much a BTC, and who's to say if it is worth $200 or $800 or $1600?

I've read that the BTC price rises more as it is used more, although that might not be entirely accurate, and with people dumping huge amounts of money into buying ASICS that we KNOW will be harder and harder to mine, (and the rewards for mining will drop from 25 BTC to 12.5 BTC sometime in the next year or so) what will that eventually do to the BTC price?

At some point it'll be like if the US Mint were to stop printing money and the dollars we have are the dollars we have, period, no more, use what you got and that's all you can ever have.  What will happen to BTC price as mining becomes harder to do?

[kireinaha]

Bitcoin is not a bubble, because Bitcoin is not simply an asset like gold or other kind of purely speculative financial instrument like derivatives and stocks. It can enter a state of mini-speculation bubbles that will correct naturally, and this is what we are indeed seeing.

I`m sorry, but this logic is dangerously flawed. To claim that bitcoin is bubble-proof or such nonsense is just flat out wrong.

Gold is not `simply` an asset. Of course, it has industrial utilities as well as jewelry craftsmanship, but its value basically comes down to the faith we put into it. Since this faith is universal across the globe and spans thousands of years, it is a very safe store of value. Stocks are purely speculative you say? Maybe you`re talking about day trading penny stocks, I don`t know. But investing long term in mid or large establish companies is not so much `speculative` as it is sound, tested, investment principles.

Which brings us back to bitcoin. How is it bubble-proof exactly? It`s still very early in the adoption phase, and can hardly be used anywhere. This cannot bring any assurance to the unbiased investor that it will become mainstream someday. Most of the benefits from bitcoin currency come down to its low transaction fees and anonymity. However, once government reaches its tentacles into the system, these benefits will mostly vanish, as bitcoin will be forced to conform with money transmission laws such as the Bank Secrecy Act. Then what incentive do consumers have to use this sytem over existing options?

Bitcoin could still be used as a speculative vehicle for years, but there`s very little on the table that would lead an unbiased investor to believe that bitcoin will reach mass adoption. For this reason, the bubble will pop, but maybe not all at once.

[BarkinTree]

exactly.... that's the thing. looking back, we may currently be in the midst of tulip mania, and for all i know, it could continue to $1k or $10k, but that doesn't mean bitcoin is immune to a bubble.

[Pente]

This looks like a job for Captain Hindsight and his Retrospectoscope!

Retrospectoscope? Please sell me one. Even if it could only look one day into the past, it sure would help me to avoid a lot of regrets!