When does adoption begin to push up BTC price?

[Cassius]

You know what I am getting at.  

There is absolutely a speculation price, and a more realistic price moved by adoption/commerce demand.

There have been countless threads on the topic, usually titled with:  "Whats the real value of Bitcoin".

Countless articles.  you know what I mean.

It is not all the same thing.

This is sort of taking the conversation off track.

Know what you are getting at. I've been asking the same question, with similar answers...
I'm guessing, but I wouldn't be surprised if current adoption hadn't been more than priced in by speculators and so, with MatTheCat, I'm half expecting a stagnant period as the 'real' value goes up as the infrastructure grows but speculators cash out at the same time. (Only half, because it's bitcoin, so anything could happen tomorrow.)
My question is what effect will new money have, if say a VC buys $1m of bitcoin, or 1 million ordinary Joes decide they want to keep $10 worth of coins to buy beer with. How much does that push up the price? That's a more 'realistic' valuation to me... but I've little idea how to go about calculating it.

[600watt]

the speculative side of bitcoin is its marketing department.

the more it rises the more the hype grows, the more people will adopt. works fantastic, imho. and it is the only way that the bitcoin economy can wrap itself around other economies. if it had stayed at $ 1,- only a few hundred thousand people could use it, because goods  worth only 12 mio could be bought with it (in one circle).

in order to go mainstream as a worldwide payment system price has to go up big time. we should be thankful for speculation that is driving the price up, adoption is following.

 

[kooke]

All the big businesses that accept BTC probably convert it to fiat ASAP, so that's not going to push the price up. As bitcoin's user base grows, so will it's price, until it reaches it's max potential users.

[windjc]

At most times, speculation is 95% of the price and adoption is 5% of the price. Sometimes during the 'bear markets', adoption reaches as much as 10-15% of the price but speculation is still 80-85% of the price.

Talk about a purely speculative statement. That statement might actually redefine the term.

[windjc]

By true value, I mean its value supported 100% by adoption, commerce, and demand for more.  We must still be in the lower hundreds.  Because despite thousands of new merchants, the price doesn't seem to have begun nudging upwards permanently.

For Bitcoin to find its 'true' value, a long slow deflationary (price) period is required, signified by a lack of new speculative capital coming into Bitcoin and holders of Bitcoin gradually cashing out for USD. In short, Bitcoin will never find its 'true value' so long as the market is infested with almost purely speculative capital. The volatility that Bitcoin has experienced for much of its short life renders it totally unsuitable for being used as a reliable means of exchange or store of wealth. The speculators need to be scared away and the best way for that to happen is for a prolonged low volatility stagnant bearish period, discouraging holding, encouraging Bitcoins to be actually spent, all while hundreds and hundreds of Businesses adopt Bitcoin as a payment option.

The true value of Bitcoin could grow to be massive, but for that to come to any long lasting fruition, I stress again that the speculators chasing fast bucks need to be shaken out.

This makes no sense. While one a micro level, Bitcoin is hampered for adoption by lack of applications making it easy to acquire, use, send, and locally remit, on a macro level it is hampered by being too small of a market cap.

In this way, it could be argued that MORE speculation is needed to drive up the market cap to make bitcoin more usable for large financial industries, including international trade.

Having a prolonged bear market will only lead to another HUGE bull market anyway. Its unavoidable. To get from $600 to $40k (Winklevoss' small bull cap prediction) means V O L A T I L I T Y. No way to avoid speculators.

What? Everyone is just going to be so afraid that bitcoin went down to $400 (or, OMG a $100 in your bearish fantasy) that they will avoid riding the train to $40k?

Ha. Its going to be become more volatile folks (not a % basis but on a dollar basis). Grab your seat belts folks.

[pungopete468]

If you look at the distribution of XBT you will see that we are in a period of growth right now. The coins in wallets with a balance greater than 1,000 XBT are decreasing while the number of coins in smaller wallets is increasing rapidly.

The market price isn't an entirely accurate representation of mainstream demand. The events of late caused a lot of stress and sell pressure to some of the earliest Bitcoin holders; this trend can't last forever...

Once those large holders either change their opinions, or finish cashing out, the price will begin to increase again. The distribution chart is showing that Bitcoin is being bought and held more than it is being bought and sold as an instrument of speculative trade. The coins held on exchanges aren't represented in the chart because the exchanges don't use individual Bitcoin wallets; what we see is an increase in the number of people holding Bitcoins off exchange which is indicative of Bitcoin holders going long...

I think the price will go back up soon. The distribution of coins is looking better and better every day...

[seleme]

At most times, speculation is 95% of the price and adoption is 5% of the price. Sometimes during the 'bear markets', adoption reaches as much as 10-15% of the price but speculation is still 80-85% of the price.

Talk about a purely speculative statement. That statement might actually redefine the term.

Lol, yeah, I love these "accurate" posts too

[MatTheCat]

This makes no sense. While one a micro level, Bitcoin is hampered for adoption by lack of applications making it easy to acquire, use, send, and locally remit, on a macro level it is hampered by being too small of a market cap.

In this way, it could be argued that MORE speculation is needed to drive up the market cap to make bitcoin more usable for large financial industries, including international trade.

Having a prolonged bear market will only lead to another HUGE bull market anyway. Its unavoidable. To get from $600 to $40k (Winklevoss' small bull cap prediction) means V O L A T I L I T Y. No way to avoid speculators.

What? Everyone is just going to be so afraid that bitcoin went down to $400 (or, OMG a $100 in your bearish fantasy) that they will avoid riding the train to $40k?

Ha. Its going to be become more volatile folks (not a % basis but on a dollar basis). Grab your seat belts folks.

If the key to having a successful unit of exchange (a.ka. currency) to facilitate trade and act as a store of wealth, was for its value to fluctuate +/- 1000% within the space of a few months, then central banks the world over would be ramping the fuck out their currencies and then crashing them to the floor as a matter of general practice.

There is a reason why 'ensuring volatility' isn't a stated policy of any central bank, anywhere.

Any asset that is driven purely by speculation has a limited lifespan. A very limited lifespan. This can be seen in the Alt-coins just as it can be seen in the penny shares, where both sectors are dominated by professional pump n dump sharks.

I agree that further down the line in the future, Bitcoin needs and will probably get greater volumes of speculative capital than ever before. But in order to entice fresh speculative capital in, some kind of solid foundations need to be established. Bitcoin needs widespread adoption where it is used for its intended purpose and for this to occur the volatility needs to be forced out the market. Bitcoin needs a long boring as hell bearish trend a la 2012 style and I believe that this is exactly what is on the cards for Bitcoin. If however, the wild volatility persists, then us traders get our dramas and opportunities to win or lose small fortunes, but Bitcoin remains a lunatic fringe concern of the financial world, used only by those looking to make off-radar financial transactions or in certain states of isolated emergency.

Anyone who actually 'likes' Bitcoin, would not just agree with me, but actively hope for a long boring bearish trend for the reasons I describe. However, most people I suspect are far more interested in seeing the nominal USD value of their holdings shoot through the roof than in the well being and wider adoption of Bitcoin per se.

[BittBurger]

Darn.

As the "OP", I really was wishing to hear that adoption/commerce/propagation was soon to burst through that $600 price and start dragging the value up, even if slowly.

Maybe its all speculation based still

Oh well, patience BittBurger.  Patience.

-B-

[windjc]

This makes no sense. While one a micro level, Bitcoin is hampered for adoption by lack of applications making it easy to acquire, use, send, and locally remit, on a macro level it is hampered by being too small of a market cap.

In this way, it could be argued that MORE speculation is needed to drive up the market cap to make bitcoin more usable for large financial industries, including international trade.

Having a prolonged bear market will only lead to another HUGE bull market anyway. Its unavoidable. To get from $600 to $40k (Winklevoss' small bull cap prediction) means V O L A T I L I T Y. No way to avoid speculators.

What? Everyone is just going to be so afraid that bitcoin went down to $400 (or, OMG a $100 in your bearish fantasy) that they will avoid riding the train to $40k?

Ha. Its going to be become more volatile folks (not a % basis but on a dollar basis). Grab your seat belts folks.

If the key to having a successful unit of exchange (a.ka. currency) to facilitate trade and act as a store of wealth, was for its value to fluctuate +/- 1000% within the space of a few months, then central banks the world over would be ramping the fuck out their currencies and then crashing them to the floor as a matter of general practice.

There is a reason why 'ensuring volatility' isn't a stated policy of any central bank, anywhere.

Any asset that is driven purely by speculation has a limited lifespan. A very limited lifespan. This can be seen in the Alt-coins just as it can be seen in the penny shares, where both sectors are dominated by professional pump n dump sharks.

I agree that further down the line in the future, Bitcoin needs and will probably get greater volumes of speculative capital than ever before. But in order to entice fresh speculative capital in, some kind of solid foundations need to be established. Bitcoin needs widespread adoption where it is used for its intended purpose and for this to occur the volatility needs to be forced out the market. Bitcoin needs a long boring as hell bearish trend a la 2012 style and I believe that this is exactly what is on the cards for Bitcoin. If however, the wild volatility persists, then us traders get our dramas and opportunities to win or lose small fortunes, but Bitcoin remains a lunatic fringe concern of the financial world, used only by those looking to make off-radar financial transactions or in certain states of isolated emergency.

Anyone who actually 'likes' Bitcoin, would not just agree with me, but actively hope for a long boring bearish trend for the reasons I describe. However, most people I suspect are far more interested in seeing the nominal USD value of their holdings shoot through the roof than in the well being and wider adoption of Bitcoin per se.

Well. That's a cool story, bro.

And you make some valid points.

But, looking at the tea leaves (VC and WS) and a crap ton of EW analysis, I think before your scenario plays out we are going to have another large push upward. This 'ol 2011-2012 comparison is so wrong for so many reasons - the main one being that $32 in 2011 was so far beyond the real value of bitcoin (I mean, have you seen the log charts?!?). Going from $120 to $1200 is small potatoes compared to that rise.  So before we could get that bearish for that long, I suspect we would need to go north quite a long ways first - way north - much further than the paltry $1200 we got to for a few days.

We are not going to go from here to $50. Aint. Going. To. Happen. Not with regulations coming and US exchanges and hedge funds and trading funds that "normal" people can invest in. There is more speculation coming over the horizon.  Its arriving this year.

So don't get that fiat too cozy in that German bank of yours.  Bitcoin isn't going to rest just because you would "like" it to.

If and when we hit the 300 EMA currently at around $450 and rising, you need to prepare yourself friend. Then maybe when we skyrocket to $10k, you can ease off the pedal for a year and a half and watch the eco-system catch up.

[MatTheCat]

So don't get that fiat too cozy in that German bank of yours.  Bitcoin isn't going to rest just because you would "like" it to.

Funny, the same thoughts of 'blatant confirmation bias' occurred to me when reading your post.

I stated what I stated a few days ago and since then, Bitcoin has done exactly what I said it would do. At this point in time, I believe it is more of the same. I shall let you know when I change my mind.

My first buy in tranche at $593 would have gotten triggered, but I removed it (along with all my other buy-tranches), cos I just didn't see it as all that worth while. As it happens, I could have turned a $300 profit had I left it intact.....pffftzt.....not worth the risk that the buy-in tranche is triggered but Bitcoin goes lower and gets stuck in a range that makes me a bag-holder. Something I have never been in Bitcoin and refuse to become.

[windjc]

So don't get that fiat too cozy in that German bank of yours.  Bitcoin isn't going to rest just because you would "like" it to.

Funny, the same thoughts of 'blatant confirmation bias' occurred to me when reading your post.

I stated what I stated a few days ago and since then, Bitcoin has done exactly what I said it would do. At this point in time, I believe it is more of the same. I shall let you know when I change my mind.

My first buy in tranche at $593 would have gotten triggered, but I removed it (along with all my other buy-tranches), cos I just didn't see it as all that worth while. As it happens, I could have turned a $300 profit had I left it intact.....pffftzt.....not worth the risk that the buy-in tranche is triggered but Bitcoin goes lower and gets stuck in a range that makes me a bag-holder. Something I have never been in Bitcoin and refuse to become.

It's pretty obvious we are going down. I didn't realize that was in debate. As I said the trend like is in the 400s and rising. It will go up again within the next 90 days. You want to log off of here for longer than that before you check to see what's happening? No, I didn't think so.

[MatTheCat]

It's pretty obvious we are going down. I didn't realize that was in debate. As I said the trend like is in the 400s and rising. It will go up again within the next 90 days. You want to log off of here for longer than that before you check to see what's happening? No, I didn't think so.

I didn't just say it was going down.

I said it was going to be pointless trying to trade it short or long. Both sides of the trade liable to being whipsawed around, not very much reward for patience or enduring the risk and be assured, that the mofos on the leveraged trading exchanges are looking down their trading book and taking action to squeeze as much blood out the market as they possibly can. If you were in the position to do so, wouldn't you be tempted? Especially considering these places have zero oversight. I know they do it and a trader is especially vulnerable to getting fkd in this way during low volume stagnation periods.

A horrible pointless market from a speculators point if view is what I called, and is the way I expect things to continue for some time. Of course, I am always ready to change my mind or take a good opportunity if I see it.