Gold collapsing. Bitcoin UP.

[dEBRUYNE]

...

I'm hearing that timeframe thrown around a lot (1 or 2 years).

It coincides with the next halving, to it's an intuitive fit. It also makes sense to see a long sideways (or slightly downwards or whatever) stretch as it usually happens in bitcoin after a huge runup has corrected. It also makes sense that it would take longer than in the past because the market has grown in number of participants, so it's quite conceivable it behaves more sluggishly.

However my gut says we'll see a substantial rise before 1 year has passed (i.e. in 2015). Not necessarily breaking the ath yet, but substantial. Why? Continual adoption plus the experience of the last halving will have the effect that more players will price in the halving sooner (or at all) than last time, so we might get an ignition before, not after the actual reward halving occurs.
...

I feel like the chatter about the halving has already started. Feels like early-mid 2012 in that regard.

June 2016 still a way off.
However, Namecoin is halving tomorrow which might produce an interesting market reaction (or not :-)

Up 20% currently, look at those weird up & down spikes on the chart: https://bitcoinwisdom.com/markets/btce/nmcbtc

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[cypherdoc]

hella intraday reversal.  look the hella out:

[cypherdoc]

still no go.  Wall St does not believe in you dear plebes:

[cypherdoc]

that sweet smell of deflation:



and more black hole shit:



yowzer!:

[justusranvier]

We can't rely on Bob not to spam the blockchain (to the point of disrupting service) using a bazillion Bob coins, each of zero market value, therefore the only answer is that transaction fees must remain in bitcoin to use the bitcoin blockchain (or sidechains denominated in bitcoin).

That quote makes me think there's still an unmet need for collaboration between cryptographers and market economists.

[chriswilmer]

Growth isn't an axis on the chart. The y-axis is expectations not growth. By the time of maturity Bitcoin could be a lot bigger than it was at the height of expectations, but have lower expectations.

This is a true statement in general, however simple arithmetic (ok, and some reasonable assumptions about use cases) implies that the price of Bitcoin would have to be at least 100x larger if it had, say, a billion users. So, if the price of Bitcoin today was $5 million per BTC, then I would agree with you... the Bitcoin ecosystem could keep growing while the expectations (i.e., market price) would just keep going down (because expectations went unreasonably high, beyond the equilibrium value). However, at current prices, it's just impossible for Bitcoin to grow much more without also raising the market price.

[Peter R]

Growth isn't an axis on the chart. The y-axis is expectations not growth. By the time of maturity Bitcoin could be a lot bigger than it was at the height of expectations, but have lower expectations.

This is a true statement in general, however simple arithmetic (ok, and some reasonable assumptions about use cases) implies that the price of Bitcoin would have to be at least 100x larger if it had, say, a billion users. So, if the price of Bitcoin today was $5 million per BTC, then I would agree with you... the Bitcoin ecosystem could keep growing while the expectations (i.e., market price) would just keep going down (because expectations went unreasonably high, beyond the equilibrium value). However, at current prices, it's just impossible for Bitcoin to grow much more without also raising the market price.

I'll add that the new coin supply (25 BTC block reward every 10 min) makes it difficult for investors to cling to unrealistic expectations over the medium term. At ~3600 BTC/day, the current price of ~$350 / BTC requires ~$1.3 million of new capital (money, energy for hashing, etc) to enter the system.  A stable price means that there's sufficient demand to absorb these new coins.  A price based on "unrealistic expectations" cannot last because the new coin supply requires that market participants continuously inject new capital to back their unrealistic expectation---but eventually they run out of money and the price falls.  (E.g., if the BTC price was $5 million per coin like Chris mentioned, it would require $18 billion in new capital each day.  Even if every current holder refused to sell for less than $5 million the price would still drop unless those holders in aggregate can inject $18 billion each day to absorb the mining supply.)

Bitcoin's inflation schedule is quite ingenious actually because the new supply forces the price back to a level commensurate with new demand.  It's not possible for the price to remain overly-hyped for too long.  

[cypherdoc]

Bitcoin's inflation schedule is quite ingenious actually because the new supply forces the price back to a level commensurate with new demand.  It's not possible for the price to remain overly-hyped for too long.  

yes it is, isn't it?

the asymptotic distribution schedule encourages new miners to get in and attempt to compete for these new coins with each and every new innovative or economically advantageous way they can devise.  current miners are encouraged to stay as long as they can keep up with costs.  new buyers of BTC are encouraged to get in on a new fixed supply currency that is "still" bootstrapping itself. 

it's obvious now (but not always in times past) that pre-mined or IPO'd altcoins are unfair to new entrants.

[justusranvier]

At ~3600 BTC/day, the current price of ~$350 / BTC requires ~$1.3 million of new capital (money, energy for hashing, etc) to enter the system.

Your list of capital types should include products and services.

Every person who sells their productivity for Bitcoin and does not immediately spend what they earn is contributing to that ~$1.3 million/day requirement.

[msin]

Every person who sells their productivity for Bitcoin and does not immediately spend what they earn is contributing to that ~$1.3 million/day requirement.

This will be the key to a major price spike in my opinion.  The more people are paid in BTC for services, employment, etc. the higher the price of BTC will go.

[justusranvier]

The more people are paid in BTC for services, employment, etc. the higher the price of BTC will go.

They have to be paid in BTC, and they have to save in BTC.

Otherwise it won't work.

[Jungian]

The more people are paid in BTC for services, employment, etc. the higher the price of BTC will go.

They have to be paid in BTC, and they have to save in BTC.

Otherwise it won't work.

Not necessarily - They have to be paid in BTC thus causing "releasing" of coins from certain individuals (like yourself) for goods and services, and keep the BTC OR sell into the hands of wealthy USD holders buying the BTC from the Vendors/3rd Party providers and them saving.

We are in the transfer of wealth stage - but its being done quietly and off the books.  We wont see increase in price unless a true ETF hits, or we get within 6-8 months of halving.  

Sit back relax and enjoy the ride.

I would also tend to believe they intend to save some of the money and not spend ALL off it. The upside to have your whole paycheck in BTC but also spend all of it every month seems like a bad trade to me.

[Adrian-x]

The more people are paid in BTC for services, employment, etc. the higher the price of BTC will go.

They have to be paid in BTC, and they have to save in BTC.

Otherwise it won't work.

Not necessarily - They have to be paid in BTC thus causing "releasing" of coins from certain individuals (like yourself) for goods and services, and keep the BTC OR sell into the hands of wealthy USD holders buying the BTC from the Vendors/3rd Party providers and them saving.

We are in the transfer of wealth stage - but its being done quietly and off the books.  We wont see increase in price unless a true ETF hits, or we get within 6-8 months of halving.  

Sit back relax and enjoy the ride.

I'm generally in this camp, but I don't think many understand what's going to happen at halving, there is even a reasonable probability that Bitcoin may look dead 6 months after halving and then explode into its new price energy zone.

While I give credit to the velocity of money theory that creates value this is an end game occurrence. At the moment I think we have an equilibrium between mining investment and profit taking. If too many new coins are saved we'll see it reflected in an increase in difficulty driven by price, this could cause a rush to get into Bitcoin along with many other triggers like an ETF of some new "banking innovation"

I think the total traded coins are quite small and wealth transfer is happening but it's not a competitive environment, rather new owners are treading with caution.

[picolo]

Every person who sells their productivity for Bitcoin and does not immediately spend what they earn is contributing to that ~$1.3 million/day requirement.

This will be the key to a major price spike in my opinion.  The more people are paid in BTC for services, employment, etc. the higher the price of BTC will go.

Miners hoard a lot of coins too. Bitcoin companies accumulate bitcoins and their owners do so as well while they pay in bitcoins for time and services.

[cypherdoc]

geez, gold and gold stocks getting bitch slapped.  darn it!  i wanted more rally to reload ZSL and DZZ!

[cypherdoc]

this is a really bad sign:

[Melbustus]

Adam Ludwin at Chain.com with some mostly spot-on thoughts:

[miners produce] by design, a secure financial network: one which is open, decentralized, programmable, and very inexpensive to use.

Without speculators, there would be no bitcoin.  They provide miners, applications, and other participants with liquidity.  If you have bought or sold bitcoin as a speculator, you have helped enable the emerging ecosystem...

Whether volatility increases or decreases, one thing is likely to be true: it won’t matter as much going forward as people think.

http://blog.chain.com/post/105287860141/why-bitcoin-apps-and-bitcoin-speculators-need-each


So Xapo, and now Chain, make my list of new VC-backed bitcoin companies with seasoned leadership who *actually* understand bitcoin.

[bambou]

this is a really bad sign:

does that means gold mining is not profitable anymore? mining bitcoin maybe?

[cypherdoc]

this is a really bad sign:

does that means gold mining is not profitable anymore? mining bitcoin maybe?

it means gold's SOV function days are numbered.

[Wekkel]

it means gold's SOV function days are numbered.

Or paper gold's SOV function