How Stable is the value of Bitcoin?

[Cyanide]

Will it fluctuate dramatically, or is it expected to not flux much over time?

[matthewh3]

The price of bitcoins has been very volatile until about the last eight to twelve weeks where it has seemed to stabilise.  Will it stay stable that is a good question but I think the current trend should continue for some time now minus any major events in the bitcoin world happening (like the block reward half'ing in December)

[David_Benz]

Been pretty steady at 5 for the entire year so far pretty much

[Kluge]

A couple weeks ago, blockchain.info had an extended outage, GLBSE went down for a while, MtGox announced they weren't doing wires for a week, and there was a massive Silk Road scam. With all that, not much happened with the price. Does that predict the future? Maybe, to some debatable degree, but it's simply impossible to know.


All that matters is what people with money do, and perhaps that's increasingly not speculators. If Yankee decides to buy 50k coins for a float in a new venture and he keeps it to himself, the price will swing up. Trends might be able to predict what other speculators will likely do after Yankee's buy-in to a degree, but they can't predict Yankee buying 50k coins for undisclosed business reasons. They can't predict the effects of Bitcoin Magazine arriving at folks' houses, they can't predict future hacks on major BTC infrastructure, they can't predict people selling off their BTC to buy an island on a whim.

[paraipan]

A couple weeks ago, blockchain.info had an extended outage, GLBSE went down for a while, MtGox announced they weren't doing wires for a week, and there was a massive Silk Road scam. Not much happened. Does that predict the future? Maybe, to some debatable degree, but it's simply impossible to know.


All that matters is what people with money do, and perhaps that's increasingly not speculators. If Yankee decides to buy 50k coins for a float in a new venture and he keeps it to himself, the price will swing up. Trends might be able to predict what other speculators will likely do after Yankee's buy-in to a degree, but they can't predict Yankee buying 50k coins for undisclosed business reasons. They can't predict the effects of Bitcoin Magazine arriving at folks' houses, they can't predict future hacks on major BTC infrastructure, they can't predict people selling off their BTC to buy an island on a whim.

^ nice TL;DR of the last events  

[Cyanide]

A couple weeks ago, blockchain.info had an extended outage, GLBSE went down for a while, MtGox announced they weren't doing wires for a week, and there was a massive Silk Road scam. With all that, not much happened with the price. Does that predict the future? Maybe, to some debatable degree, but it's simply impossible to know.


All that matters is what people with money do, and perhaps that's increasingly not speculators. If Yankee decides to buy 50k coins for a float in a new venture and he keeps it to himself, the price will swing up. Trends might be able to predict what other speculators will likely do after Yankee's buy-in to a degree, but they can't predict Yankee buying 50k coins for undisclosed business reasons. They can't predict the effects of Bitcoin Magazine arriving at folks' houses, they can't predict future hacks on major BTC infrastructure, they can't predict people selling off their BTC to buy an island on a whim.

Thanks

[Oinsane1]

Not stable at all.. though it is more stable than it used to be

[enmaku]

like the block reward half'ing in December

Miner's revenue seems to have stabilized around 25% so with the block reward halving in December one of two things will have to happen to maintain that stability: the price doubles or the difficulty halves (or some combination of the twi). While it's likely that the decreased daily supply (from ~7200 to ~3600 BTC) would increase value somewhat (assuming the demand stays the same) the ~3600 BTC influx that is removed from the block reward halving is a small fraction of daily trade volume, so my money is on difficulty halving as the decreased operating margin pushes less efficient miners out of the game.

Still, I'm interested to see what an effective halving of the inflation rate does to BTC's price point. Whether it's good or bad it will at least be interesting  

[the joint]

Aligning with what enmaku stated, here is my prediction:


1)  First few weeks after reward halving --->  No significant changes
2)  Next few weeks --->  Slowly, inefficient miners begin to drop out as they see the price isn't rapidly soaring.
3)  Months later, the price begins to rise slowly and some miners hop back in. 

My reasoning:  After the reward change, I think a lot of miners will continue to mine in anticipation of a value hike.  I think everyone will be more or less waiting to see what happens.  But, I don't believe the price will jump drastically and hold because even though the rate of supply will be cut in half, the total supply will not be cut in half.  As a result, some miners will drop out (but I don't think 50% will).   But, over time, the effects of the decreased supply rate will accumulate and the price will slowly climb.  As this happens, more miners will hop back in since the profit margin will increase again.

[Dr.Steve]

I've watched the exchanges for many months. There are occasional daily swings, but it seems stable at around $5/btc. It did plummet when TradeHill went dark, but overall, pretty steady.

I'm not sure what the cost of mining is per BTC. Seems to depend on the electric costs.

[mollison]

I'm not sure what the cost of mining is per BTC. Seems to depend on the electric costs.

Here is a site to calculate the profitability of mining.

http://bitcoinx.com/profit/

Maybe you know about this already... but maybe not everyone does. 

[J.Socal]

Whats stopping a country that wants to mine with nuclear power?

[Tuxavant]

Electrons don't SHA256 themselves. They need a butt load of processors too.