Bitcoin has went up every single year since inception

[rocks]

I'm not being critical or looking to debate, but when I see the phrase:
This takes all the standard investment advice and throws it out...
I have such a strong flashback to the 1999/2000/Spring 2001 dot com bubble, that it's hard to avoid drawing a comparison.

I completely agree that any investment advice that claims "this time is different" should be met with a very high degree of skepticism because this time is almost invariably NOT different. The current classic example is the .com boom where every TV and newspaper and adviser claimed that PE ratios no longer mattered, and what they ended up with was a bunch of unprofitable crap businesses which would never turn a profit.

But that's not what I said, I never claimed that "this time is different", what I claimed is bitcoin needs to be looked at from a different lens than most people are used to, which it does.

Most people only see the price of a business (stock prices) after a given business has become established and gone public, and the process of going public involves significant marketing efforts to get the maximum valuation possible. What this means is your average investor usually only sees the slow growth phase of a business, take for example facebook or google. Sure google has gone up a lot since the IPO, but it's still only 10x it's IPO price, and that was 10 years ago. The simple fact is most of google's growth was already realized by the time it went public, and it only has so much growth left.

What most people don't usually see is the early exponential adoption phase, but VCs and angle investors are used to seeing this. For example if you tracked facebook's valuation from a seed round through multiple VC rounds, it would have looked to just be going up exponentially, but in reality the valuation was largely tracking the expected user base through a long period of S-curve adoption that went from Harvard, through universities, through high schoolers and finally the general public.

This is what we are witnessing in the price of bitcoin, we are in a sense the angle and VC investors and for once are getting a glimpse of what they see during a successful ramp. What is scary are the number of "financial experts" on CNBC and the like who don't understand this yet provide financial advice to millions.

TL;DR - Bitcoin is a startup and we are the angle and VC investors who will either see our investment ramp exponentially up with S-curve adoption or crash to zero with a total loss. That is the lens people should view this and what I meant by takes all the standard investment advice and throws it out... "Standard investment advise" here is retail investment advise by CNBC and your Schwab advisor.

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[halfawake]

Although Bit_Happy has very valid points, this chart (and the continued increasing adoption rate) of bitcoin is why I plan on buying back in despite losing all my bitcoins to a scam.  Needless to say, I won't be making that mistake again, this time, they'll be going straight into cold storage.

Also, this article likely bodes well for the future of bitcoin.  Actually...it's a bit of a mixed bag, really.  I read the PDF Citi put out that's linked to from here, and it's clear they see bitcoin as a threat to their business.  If they have a way of getting the US federal government to run US exchanges out of business, it would be bad news for bitcoin.  The bitcoin protocol is itself something they can't shut down since it's peer to peer, but that's obviously not the case for exchanges and businesses like Coinbase or even Localbitcoins.

[4mherewego]

When you compare January 1st price vs Dec 31st price of every year, Bitcoin has always been going up, and most of the time significantly up.

January 1st 2010: around $0.002 per Bitcoin
December 31st 2010: around $0.80

January 1st 2011: around $0.80
December 31st 2011: around $4.70

January 1st 2012: around $5.00
December 31st 2012: around $13.25

January 1st 2013: around $13.00
December 31st 2013: around $730

January 1st 2014: around $750
December 31st 2014: ? ? ? ? ?

Do you think this year is an exception?

January 1st 2010: around $0.002 per Bitcoin
December 31st 2010: around $0.80
increase of 300%

January 1st 2011: around $0.80
December 31st 2011: around $4.70
increase of 487.5%

January 1st 2012: around $5.00
December 31st 2012: around $13.25
increase of 165%

January 1st 2013: around $13.00
December 31st 2013: around $730
increase of 5515%

January 1st 2014: around $750
December 31st 2014: ? ? ? ? ? (i expect $2500 ish)

Expected increase 233%

Nobody has commented on this yet?
http://www.wolframalpha.com/input/?i=%280.8-0.002%29%2F0.002+in+percent

[El Cabron]

Oh hold up...am I doing the math right on this?

Jan 2010

Bit is .002
If you bought $10.00 worth, you'd own 5000 btc?
And if you held onto it through all this time, all 5k, to today's $493, your bitcoin would be worth $2,465,000

And at one time, when it went to $1100, your bitcoin was worth $5,500,000??

LOL wow, no wonder yall are steamed! But hey, if that's actually correct above and I didn't do it wrong (because it seems like it really can't be that simple), and someone out there just held onto 5k btc from the beginning, to end up with 2 million dollars on a $10 buy is insane.

Even more insane if they bought a few hundred/thousand bucks worth.

Makes the rest of us want to go slam our heads into the walls though...  

Yes.  Why do you think that Goat is buying Lambos and Risto has a castle in Estonia?  They bought A LOT of coins really, really cheap.

I know why. Goat owe me 4105 BTC. This is a serious scam and he is playing rich with MY money. 2012 I invested a lot in his Tygrr-bot. I thought it sounded like a cool arbitrage bot. It was hard to go profit and a lesser amount was lost to exchange failure. The project was ended but much money was left. He chose to refund all invested with 90-100%. But ONE person owned more than 50% of all funded 10000 BTC, that was me. We made a contract with 1% interest, 1% payback each week. That would last in 100 weeks or almost two years and after that period his debt was ended to me. He payed me for 11 weeks. He still owes me 4105 BTC in principle payment with zero interest accounted for.

Where is justice?

Do you have a written contract?  If so, I would think a lawyer would easily take the case for 4105BTC *30% (lawyer's fee) * 666 ($/coin) = $820,179.

And you'll end up with around $2 million.

Better than sitting around moping on this thread.

https://bitcointalk.org/index.php?topic=635956.0

he got a lawyer to take the case for a few hours, lol!

[kokojie]

I think it's pretty funny when in early 2010, when you ask nicely to get some free Bitcoin to play with, you don't get 1, you don't get 10, but you get hundreds of Bitcoin thrown at your address.

Two pizzas were bought for 10,000 BTC

Nowadays you are extremely lucky if someone will give you 0.001 BTC for free.

[halfawake]

I think it's pretty funny when in early 2010, when you ask nicely to get some free Bitcoin to play with, you don't get 1, you don't get 10, but you get hundreds of Bitcoin thrown at your address.

Two pizzas were bought for 10,000 BTC

Nowadays you are extremely lucky if someone will give you 0.001 BTC for free.

That's because of simple math.  Back in early 2010 the market value of a bitcoin was less than one penny.  Thus, someone sending you one hundred bitcoins, say, would only be sending you 1 cent in 2010 dollars.  People didn't know that it'd be worth so much now or they probably wouldn't have given it away so freely. 

The sheer value of present bitcoins is why I'd be investing in (at minimum) a hazmat suit to dig through trash if I were that guy who threw away a hard drive containing thousands of bitcoins.  Hell, for that kind of money, it'd be worth renting some heavy machinery to dig through it more quickly.  I'd do it they were my bitcoins. 

[birr]

we should be at about $738 today using regression analysis at http://cryptocoinstats.com/priceforecaster.php

That's not linear regression, and it's not even the exponential curve you would get by doing linear regression on a log chart.
What curve fitting did they use... anybody?

[Gimmelfarb]

When you compare January 1st price vs Dec 31st price of every year, Bitcoin has always been going up, and most of the time significantly up.

true, there's no doubt about that. but trends only work for so long. i'm sure this trend will be broken eventually, too. hopefully not this year -- i'm holding right now.

[jeffersonairplane]

I think this year may be an exception. I think the price will rise pretty dramatically in the near future.

[thezerg]

When you compare January 1st price vs Dec 31st price of every year, Bitcoin has always been going up, and most of the time significantly up.

January 1st 2010: around $0.002 per Bitcoin
December 31st 2010: around $0.80

January 1st 2011: around $0.80
December 31st 2011: around $4.70

January 1st 2012: around $5.00
December 31st 2012: around $13.25

January 1st 2013: around $13.00
December 31st 2013: around $730

January 1st 2014: around $750
December 31st 2014: ? ? ? ? ?

Do you think this year is an exception?

Roughly speaking, over the long term price is directly correlated to adoption.

Since 1/1/2012 when the price was $5, we have gone up 135x to $675 (current coinbase price). The question is do you think bitcoin usage has gone up 135 times in the past 2 1/2 years. Personally I think it has given the momentum of new services, or at least will be soon.

What we are witnessing in the price is simply growing S-curve adoption. This is why people incorrectly keep thinking bitcoin is in a bubble, even though each "bubble" is higher than the last one. What we are witnessing for the first time is exponential S-curve represented in price, that has not happened before. Maybe VCs in Facebook and Google could see it, but most of us never have.

This takes all the standard investment advice and throws it out. If price equals adoption, and that adoption is growing along a typical S-curve, the price is virtually guaranteed to rise during the "early adopter" phase where less than 3% of people use it.

I'm not being critical or looking to debate, but when I see the phrase:
This takes all the standard investment advice and throws it out...
I have such a strong flashback to the 1999/2000/Spring 2001 dot com bubble, that it's hard to avoid drawing a comparison.
Never, never ever throw out all the standard investment wisdom, or think we have entered a new, permanent Era of Enhanced Valuation....this is what comes after:



It has been well over a decade now, and the Nasdaq still has never fully recovered.

Note: I am not saying BTC is unable to go much higher.
These phrases set off loud and clear alarm bells: "takes all the standard investment advice and throws it out" or "these companies/this asset cannot use the same valuation models as in the past"* (translation circa 2000 == "stocks of companies with no profits really are worth huge prices")
*Edit: Obviously Bitcoin doesn't have an established "historical valuation model", and we are pioneers in an exciting adventure.

My main point is:
If Bitcoin reaches $20,000 each and the fundamentals are strong enough, then that will be the "correct" price. If the "bubble" is based mostly on speculation and panic buying, then it will crash really hard. Either way, there is no need to "take all the standard investment advice and throw it out"

There is one HUGE difference between the technology bubble of 2000 and bitcoin.  And it is this:  if you added up the projected revenue of all the tech bubble companies in any particular industry you got a number that was orders of magnitude higher than the most optimistic projection.  Basically, all 10 competing companies were priced in the expectation that they would get 100% of the market.  But of course only 1-2 companies were going to "win", and the rest fold.

Now, in the Bitcoin case, projections take a SINGLE market (store of value, or international payment, for example) and assume that Bitcoin gets a small % of it (say 10%).  With this, we get a number MUCH higher than its current market cap.  Only when you start reading the "to the moon" projections of 300000-1000000 per coin do you see people starting to imagine significant (> 50%) market penetration in multiple markets.

[AceWallen]

i'm always one to bet the trend so i'm still holding like usual. i hope this doesn't happen to be the year that we break this trend. but like i said, my money is on up.