Why does acceptance of Bitcoin has to do with the price of Bitcoin?

[pikabit]

it's simple, more people using it, mean more people buy it, which mean better price

It is not that simple. More people using more bitcoins means that more people spend more bitcoins (which were previously stashed away). The net effect on the Bitcoin price remains to be seen...

the point is that more people using it mean more volume mean a better value

As I said before, it is not given. And the dynamics of the Bitcoin exchange rate as of recent confirms that. So all expectations that the wider acceptance would unconditionally bring about the higher value may ultimately turn out a bit exaggerated (let alone hopes for a million dollars per coin)...

Wider acceptance would not have an immediate effect, but is expected to result in a price increase in the long term. Of course, no rational person would expect it to go to a million dollars.

We need to fix these god damn pesky ATM machines first. BTC should be cooler to use, none of that ID scan bullshit man.

[deisik]

it's simple, more people using it, mean more people buy it, which mean better price

It is not that simple. More people using more bitcoins means that more people spend more bitcoins (which were previously stashed away). The net effect on the Bitcoin price remains to be seen...

the point is that more people using it mean more volume mean a better value

As I said before, it is not given. And the dynamics of the Bitcoin exchange rate as of recent confirms that. So all expectations that the wider acceptance would unconditionally bring about the higher value may ultimately turn out a bit exaggerated (let alone hopes for a million dollars per coin)...

Wider acceptance would not have an immediate effect, but is expected to result in a price increase in the long term. Of course, no rational person would expect it to go to a million dollars.

Now I'm very doubtful about this (I mean Bitcoin universal acceptance). Actually, I couldn't say that it is significantly more widely acceptedtoday than it was a year ago. I think one year is enough to come to a (preliminary) conclusion. Also, I think that after the Cyprus financial disaster (first half of 2013) everyone who is connected to finances in some way is aware of the technology, so you won't get away by the argument that it needs more publicity...

[Hiro_Y3k]

There's definitely a lot of off-market transactions occurring. Obviously brokers know that buying/selling big blocks would offset the market and create too much volatility. Barry Silbert's Bitcoin Investment Trust and the hedge fund Binary Financial have acknowledged publicly that they do it. I wouldn't be surprised if Pantera Capital and GABI have been making off market trades on behalf of their high end clients like family practices, private equity firms and fund managers. This is the business. The trading on the exchanges are for the kids. Once the money cap is large enough those transactions will occur more regularly on the exchanges.

I believe the price of bitcoin is far behind the product & infrastructure development (e.g. Circle, Bitpay, XAPO, Coinbase, Bitgo, Moneero). Though there is no direct correlation, the increasing hash rate indicates a great of activity. The increasing difficulty level should also play a critical factor too - more prominently when bitcoin approaches halving. The VCs and entrepreneurs are in it for the long haul regardless of the day-to-day price. Personally, I would love to see a rally just to remind people how explosive bitcoin is. The price is a nice feature to increase greater adoption among speculators.

Bottom line: like everyone else, we have to wait and see and allow the market to play itself out. Long term, the bitcoin bulls know this is a once in a generation technology therefore a once in a lifetime investment opportunity. To each his own.

[master-P]

it's simple, more people using it, mean more people buy it, which mean better price

It is not that simple. More people using more bitcoins means that more people spend more bitcoins (which were previously stashed away). The net effect on the Bitcoin price remains to be seen...

the point is that more people using it mean more volume mean a better value

As I said before, it is not given. And the dynamics of the Bitcoin exchange rate as of recent confirms that. So all expectations that the wider acceptance would unconditionally bring about the higher value may ultimately turn out a bit exaggerated (let alone hopes for a million dollars per coin)...

Wider acceptance would not have an immediate effect, but is expected to result in a price increase in the long term. Of course, no rational person would expect it to go to a million dollars.

We need to fix these god damn pesky ATM machines first. BTC should be cooler to use, none of that ID scan bullshit man.

The fact that you need to scan your ID at a BTC ATM is due to the fact that there are AML rules in place that need to be followed by ATM operators, as they are likely a MSB. I think that how "cool" something is will have little to do with overall acceptance but rather the ease of use and the economics of using bitcoin will influence people much more.

[Timetwister]

The more merchants =  more btc flowing = stronger economy.

Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.

[Mightycoin]

Why is there a correlation between the two?
Thanks

More the people use the bitcoin in their daily life more the value of it increases.That's doesn't need a explanation does it??Literally they are directly proportional to each other.

[deisik]

Why is there a correlation between the two?
Thanks

More the people use the bitcoin in their daily life more the value of it increases.That's doesn't need a explanation does it??Literally they are directly proportional to each other.

Yes, it does need an explanation. In fact, in real life there are a multitude of factors that can not only render this declared dependence not so direct but could even make it inverse as we probably see right now. The possible reasons for this have been explained before...

[wasserman99]

The more merchants =  more btc flowing = stronger economy.

Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.

The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.

[jjacob]

The more merchants =  more btc flowing = stronger economy.

Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.

The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.

We need bitcoin banks, to get interest on our bitcoins. 

[Timetwister]

The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.

Demand can also come from people that want to save in bitcoins, not only from people that want to spend them. Gold isn't valuable because people spend it on goods and services, but because it's considered as a store of value by enough people.

We need bitcoin banks, to get interest on our bitcoins. 

For the moment you can directly invest in some places, like Bitfinex or Dicebitcoin. But we'll have bitcoin banks for sure in the future, and also stock exchanges to facilitate direct investing (well, we already have the Nxt asset exchange).

[Erdogan]

The more merchants =  more btc flowing = stronger economy.

Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.

The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.

We need bitcoin banks, to get interest on our bitcoins. 

Correct, but you have to make sure the bank is good, there will be no bailouts.

[Wealthy]

Why is there a correlation between the two?
Thanks

While accepting bitcoin people have to convert it to fiats to accept.Say you bought a burger at a food truck for $5 then you are paying the bitcoin equivalent to $5 not really paying bitcoin

[snappa4ever]

The more merchants =  more btc flowing = stronger economy.

Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.

The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.

We need bitcoin banks, to get interest on our bitcoins. 

In order for a bank to potentially offer interest on deposits they would need to also lend out depositors' money and run on a fractional reserve system. If I knew how people on this forum feel about sites running on a fractional reserve (and I do), then I would say that this idea would not be taken very well.

[Erdogan]

The more merchants =  more btc flowing = stronger economy.

Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.

The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.

We need bitcoin banks, to get interest on our bitcoins. 

In order for a bank to potentially offer interest on deposits they would need to also lend out depositors' money and run on a fractional reserve system. If I knew how people on this forum feel about sites running on a fractional reserve (and I do), then I would say that this idea would not be taken very well.

It can have full reserves.

[marife01]

Maybe because, the higher the demand/acceptance, the higher the price.