Vast expansion of BTC utility/reputation - but no rise in BTC price? Why?

[Dr Bloggood]

So over the last 2 months we have seen expansion with BTC on many, many levels: For example, a whole bunch of new BTC ATMs were installed, many more people have heard of BTC now (does your auntie know what it is now?), a lot more businesses are accepting BTC, the MSM press is suddenly filled with articles about it, new services popping up everywhere - but the price has not been rising!

Now you could say I'm way too impatient, the price has just quadrupled or so, and of course BTC evaluation has made huge progress, but that was longer ago than all those innovations taking place. So why is that?

Is this about cycles (fundamental expansion/ price expansion and contraction), or is it simply that price lags a bit behind the fundamentals (how much? wouldn't we have to see a new spike in prices soon? how many people are standing on the sidelines waiting?)?

Maybe some seasoned bitcoiners can tell us their thoughts: How has the expansion played out so far in past cycles (crash last spring, etc..)? Any coherences?

For example, I heard about BTC for the first time in March 2013. It wasn't until December 2013 that I put some money into it though. Maybe that's the ordinary way it goes psychologically - there is just some "incubation period".

How long did it take for you between hearing about BTC and investing in it?

[tarmi]

already priced in.

[BitCoinNutJob]

it went up a shit ton already, dont forget it was hundred bucks few months ago

[aesma]

As a currency, its price vs other currencies doesn't matter per se, it's only rising because some people see it as a commodity, which is not necessarily a good thing to get a lot of people on board. You may be ready to put large parts of your assets, your salary, the fruit of your business, etc., in bitcoin, but most people will stay well clear of doing that.

[coins101]

1. Is the price actually being partially supported by multipools trading alt coins for BTC?

2. There is still trade in China and the Asia region, but the China policy on limiting fiat connectors and some merchants has slowed expansion into the wider population and this has subdued price increases.

3. Lack of clear regulation has prevented start-ups from going on a marketing drive to promote their new services.

4. China has a lot of problems with funds that lent out $1trillion over the last few years failing to meet their expected returns. This is causing financial stress amongst those put money in.

5. BTC is at a self-supporting level at the moment with the players already around and a slower than Sept-Nov 2013 expansion in its user base.

just my thoughts on what is going on with the price.

[BTCisthefuture]

Many are pointing to market manipulation coming out exchanges in China as one reason.   http://www.coindesk.com/reality-chinese-trading-volumes/

Other reasons people have mentioned hold truth as well

[Bitbuy]

1. Is the price actually being partially supported by multipools trading alt coins for BTC?

Interesting. This is IMHO the only use / purpose of altcoins.

[The_Gloomfrost]

My thoughts (I agree with most of the stuff above, just adding to the list):

1. 90% still treat it like an investment. Sounds like you do as well. Investments101: You buy when you think the price will rise. Let's say you bought in summer 2013. You bought because you were speculating more adoption, services, etc. Price skyrocketed; congrats. Now you sell out (as many did when it was >$1000), or you continue holding IF you think there will be a continued price increase. We EXPECTED ebay/newegg/TG/OS to accept bitcoin. That was priced in. We expected more hazy regulation; that was also priced in. What WILL affect the price is if there will be a 'shocker' no one expects. This can go both ways.

2. [most] Merchants currently accepting bitcoin may affect the price negatively because they essentially dump it on the exchanges. When you use bitpay, you are selling your coins for fiat, not transferring it to the merchant. This adds selling pressure so the effect of 'X now accepts bitcoin!' is ambiguous - good because it creates more intrinsic value for BTC but bad because it adds sell pressure.

3. I agree with your 'lag' argument. For new money to come into bitcoin, first there needs to be a good reason to do so. So as we develop more infrastructure, and get more acceptance, then people might buy in.

3b. The issue though is that before you could claim 'exponential returns!' and thus we had a lot of new money coming in and hoarding bitcoin as an investment. Now, it's a bit more difficult to say that because we had a  'top' or a 'peak' at ~$1200/coin, and the price is cooling - much less exciting to put money in as an investment unfortunately.

I would be okay if bitcoin stayed at one price because to me stability is more important than a price increase. If you really want to see your wealth grow; start mining something, release an epic altcoin, start a business or invest in the stock market or penny stocks. Remember there is no free lunch.

[xdigital]

The reason Bitcoin price doesn't rise because there is No Demand For It.
Yes, the acceptance has grown but people don't have any reason to buy BTC to purchase stuff.

The reason that bitcoin price was exploded in December is a lot of Chinese wants to move their wealth out of the country.
Of course they still do now but it's lot harder, since government is trying to stop it.

[jcoin200]

The reason Bitcoin price doesn't rise because there is No Demand For It.

Exactly.  Why are people going to go through the hassle of learning about BTC, then the hassle of acquiring it, just to shop on overstock.com.  It is going to take them longer to acquire the BTC, then if they just ordered the item in the first place.  Until these merchants put in some sort of incentive to use BTC on their site, it doesn't look like it will encourage more people to adopt its use.

[C. Bergmann]

Yes, I have to agree. It's good to have this infrastructure, but most people just don't need bitcoin. Even if amazon would accept bitcoin I would love it and use it, but I won't buy more bitcoins than I do now. It may be a basic attribute of a currency you can take it with an atm and buy things with it on amazon - but it's no special feature. You can do both with traditional currency. And, hey, with traditional currency there are no fees. To get bitcoin at an atm cost 5-7%, to sell it on, imagine, amazon, 0.0001 btc. It costs time and money to use bitcoin. The opposite should be real.

Maybe porn. Maybe software. Maybe international crowdfunding or coworking or freelance.

I hope it wouldn't become illegal file sharing. This wouldn't work out well for us ...

[Dr Bloggood]

I can't agree with you guys on lack in utility being the reason. BTC was even less useful as a currency when it was at $300 or $50 or $1 - but it has risen back then as well! So obviously that's not what's holding the price back.

It would be cool to get the opinion of people who have been into BTC for at least one year! Most previous posters have just signed up recently.

Anybody?

[Gulinborsti]

The reason Bitcoin price doesn't rise because there is No Demand For It.
Yes, the acceptance has grown but people don't have any reason to buy BTC to purchase stuff.

The reason that bitcoin price was exploded in December is a lot of Chinese wants to move their wealth out of the country.
Of course they still do now but it's lot harder, since government is trying to stop it.

The late XBT price explosion is hindering it's value for payment because the price was growing a lot faster than the acceptance aka merchants accepting XBT.
The high price actually reduced XBT to a commodity like gold.

We should all wish for end to the december "bubble" - well, except for the speculators - and return to a reasonable price level to give an incentive for buyers AND merchants to get into (aka buy) and trade in XBT on the increasing number of acceptance points.

[aesma]

Actually the price dropping would not help either, what is needed is stability.

[Timetwister]

It has increased too much lately, that makes many of us reluctant about buying more. Even if it seems like it's a good buy, it makes us feel stupid for not having bought a few months earlier for a much lower price.

[mestar]

So over the last 2 months we have seen expansion with BTC on many, many levels: For example, a whole bunch of new BTC ATMs were installed, many more people have heard of BTC now (does your auntie know what it is now?), a lot more businesses are accepting BTC, the MSM press is suddenly filled with articles about it, new services popping up everywhere - but the price has not been rising!

Name one Bitcoin business that would not work today if Bitcoin was $10.

[Dr Bloggood]

So over the last 2 months we have seen expansion with BTC on many, many levels: For example, a whole bunch of new BTC ATMs were installed, many more people have heard of BTC now (does your auntie know what it is now?), a lot more businesses are accepting BTC, the MSM press is suddenly filled with articles about it, new services popping up everywhere - but the price has not been rising!

Name one Bitcoin business that would not work today if Bitcoin was $10.

What are you implying, can you get more specific? And by "BTC business", do you mean some Service like Bitpay or a BTC exchange or businesses that accept BTC as payment?

[cryptoanarchist]

Be patient, OP. 

[mestar]

So over the last 2 months we have seen expansion with BTC on many, many levels: For example, a whole bunch of new BTC ATMs were installed, many more people have heard of BTC now (does your auntie know what it is now?), a lot more businesses are accepting BTC, the MSM press is suddenly filled with articles about it, new services popping up everywhere - but the price has not been rising!

Name one Bitcoin business that would not work today if Bitcoin was $10.

What are you implying, can you get more specific? And by "BTC business", do you mean some Service like Bitpay or a BTC exchange or businesses that accept BTC as payment?

I mean all of them.  But mostly Bitpay, their customers, and businesses that take BTC directly. 

Name one that would not work today if Bitcoin was $10.

[guybrushthreepwood]

There needs to be some really big news really for the price to spike. It's got off to a slow start this year but I'm sure it'll grow nicely during the course of the year.