Volatility, ain't seen nothing yet, 10K to 1M in 1 year???

[Flashman]

Ladies and Gentlemen,

It's only just really sunk in with me, how low on the adoption S curve we are at present. We are quite substantially below 1% so far. Typical S curves tend to exhibit slopes of about 1 in 10 in their first phase. Beyond the first crook, in mass adoption phase, this becomes about 10 in 1. Tipping points in various technical innovations over the years appear to occur at between 2 and 5% adoption. This is the inflection point in the S curve.

Thus at the inflection point, adoption accelerates 10 times faster.

If bitcoin is capable of 10x price increase in a "bubble" at present, on our early adoption "bunny" slope, what the hell will happen when adoption rate is 10x?

I put it to you that a 100 fold increase in price is possible.

I do not think this is going to happen very soon, I think we will have to be at a 100 day MA of $10,000 and get at least 7 million North American users to hit tipping point. At the earliest, I think it's 18 months away. We need a couple of "bubble" cycles to get up there.


In essence a burst dam scenario, we are the trickle.


Flash.

[own3d]

I put it to you that a 100 fold increase in price is possible.

Of course.

BTC market cap right now: 5.1 Billion

For comparison, Apples market cap right now: 700 Billion

http://www.macrumors.com/2014/11/25/apple-market-cap-700-billion/

So after a 100 fold increase in price, all coins combined are worth less than one major US company.

Not that i compare BTC with a company. Just to give a little perspective in the amounts of money out there.

So do your math, and act accordingly. Then just wait 5, 10 or 20 years... Good Luck 

[Wekkel]

Still the best asymmetric bet out there...

[dinofelis]

I put it to you that a 100 fold increase in price is possible.

Of course.

BTC market cap right now: 5.1 Billion

For comparison, Apples market cap right now: 700 Billion

http://www.macrumors.com/2014/11/25/apple-market-cap-700-billion/

So after a 100 fold increase in price, all coins combined are worth less than one major US company.

Not that i compare BTC with a company. Just to give a little perspective in the amounts of money out there.

So do your math, and act accordingly. Then just wait 5, 10 or 20 years... Good Luck 

That's very important.  Apple's worth 700 billion, because there is real fundamental value there.    The market cap of Apple is real: if all the apple shares are sold over one year's time, there will probably be enough takers and the market cap will hold, because it has fundamentals.

Bitcoin's market cap isn't really 5 billion.  There's only a very small liquidity that is actually exchanged.  If half of the coins were sold next year, the price would plummet.  If you are holding 1 million coins, you cannot really make $350 million.  By the time you've sold half of them, the price would probably be something like $100.- or less.

That is because for the moment, the fundamentals of bitcoin (merchant adoption, and share of the gold market for instance) cannot even sustain the current market cap if bitcoin were totally liquid (if all coins were regularly exchanged).

I would guess that the highest fundamental at this moment is the black market share treated in bitcoin.

Bitcoin is as of now still a hugely speculative asset, speculative in the sense of people counting on a strong price increase in the future.  That's why many hold their coins: expecting it to be worth several $1000.- or even much more.
However, I have a hard time believing such a price is sustainable if the fundamentals don't follow.  There could be a (manipulated) surge, but I can't believe that most coins could be exchanged at such a high price - it would automatically lead to a price crash afterwards when holders would want to cash in (that is, if the coins became liquid).

So in order to have a high sustained coin price, the fundamentals must rise.  Merchant adoption is the way.  Bitcoin is way below apple, because what is actually bought with bitcoin is way below what Apple brings on the market.
I don't think that will come overnight.

[inca]

I put it to you that a 100 fold increase in price is possible.

Of course.

BTC market cap right now: 5.1 Billion

For comparison, Apples market cap right now: 700 Billion

http://www.macrumors.com/2014/11/25/apple-market-cap-700-billion/

So after a 100 fold increase in price, all coins combined are worth less than one major US company.

Not that i compare BTC with a company. Just to give a little perspective in the amounts of money out there.

So do your math, and act accordingly. Then just wait 5, 10 or 20 years... Good Luck 

That's very important.  Apple's worth 700 billion, because there is real fundamental value there.    The market cap of Apple is real: if all the apple shares are sold over one year's time, there will probably be enough takers and the market cap will hold, because it has fundamentals.

Bitcoin's market cap isn't really 5 billion.  There's only a very small liquidity that is actually exchanged.  If half of the coins were sold next year, the price would plummet.  If you are holding 1 million coins, you cannot really make $350 million.  By the time you've sold half of them, the price would probably be something like $100.- or less.

That is because for the moment, the fundamentals of bitcoin (merchant adoption, and share of the gold market for instance) cannot even sustain the current market cap if bitcoin were totally liquid (if all coins were regularly exchanged).

I would guess that the highest fundamental at this moment is the black market share treated in bitcoin.

Bitcoin is as of now still a hugely speculative asset, speculative in the sense of people counting on a strong price increase in the future.  That's why many hold their coins: expecting it to be worth several $1000.- or even much more.
However, I have a hard time believing such a price is sustainable if the fundamentals don't follow.  There could be a (manipulated) surge, but I can't believe that most coins could be exchanged at such a high price - it would automatically lead to a price crash afterwards when holders would want to cash in (that is, if the coins became liquid).

So in order to have a high sustained coin price, the fundamentals must rise.  Merchant adoption is the way.  Bitcoin is way below apple, because what is actually bought with bitcoin is way below what Apple brings on the market.
I don't think that will come overnight.

Sorry but you don't understand what market capitalisation means. Apple shares, any share is precisely the same as bitcoin. If enough shares are sold the market capitalisation will collapse. Its actual value is every bit as illusory as bitcoin. Sure you can do some calculations and attempt to value apple stock. But the share price is simply a transient figure backed by supply and demand and looking at price earning multiples for a company like amazon is also highly speculative.

Not sure what you are trying to say here.

[brg444]

I put it to you that a 100 fold increase in price is possible.

Of course.

BTC market cap right now: 5.1 Billion

For comparison, Apples market cap right now: 700 Billion

http://www.macrumors.com/2014/11/25/apple-market-cap-700-billion/

So after a 100 fold increase in price, all coins combined are worth less than one major US company.

Not that i compare BTC with a company. Just to give a little perspective in the amounts of money out there.

So do your math, and act accordingly. Then just wait 5, 10 or 20 years... Good Luck  

That's very important.  Apple's worth 700 billion, because there is real fundamental value there.    The market cap of Apple is real: if all the apple shares are sold over one year's time, there will probably be enough takers and the market cap will hold, because it has fundamentals.

Bitcoin's market cap isn't really 5 billion.  There's only a very small liquidity that is actually exchanged.  If half of the coins were sold next year, the price would plummet.  If you are holding 1 million coins, you cannot really make $350 million.  By the time you've sold half of them, the price would probably be something like $100.- or less.

That is because for the moment, the fundamentals of bitcoin (merchant adoption, and share of the gold market for instance) cannot even sustain the current market cap if bitcoin were totally liquid (if all coins were regularly exchanged).

I would guess that the highest fundamental at this moment is the black market share treated in bitcoin.

Bitcoin is as of now still a hugely speculative asset, speculative in the sense of people counting on a strong price increase in the future.  That's why many hold their coins: expecting it to be worth several $1000.- or even much more.
However, I have a hard time believing such a price is sustainable if the fundamentals don't follow.  There could be a (manipulated) surge, but I can't believe that most coins could be exchanged at such a high price - it would automatically lead to a price crash afterwards when holders would want to cash in (that is, if the coins became liquid).

So in order to have a high sustained coin price, the fundamentals must rise.  Merchant adoption is the way.  Bitcoin is way below apple, because what is actually bought with bitcoin is way below what Apple brings on the market.
I don't think that will come overnight.

Merchant adoption is not a fundamental of Bitcoin. The currency aspect will follow the store of value speculation and not the other way around.

Higher adoption of the speculative assets will eventually lead to more market stability which might create more incentive to use Bitcoin as a currency.

But that's beside the point, the deflationary nature of Bitcoin encourages saving and discourages casual spending. Unlike the present fiat economy, savers are rewarded. People need to hoard it in order to create value.

http://www.contravex.com/2014/02/25/matters-of-bitcoin-merchant-adoption/

[coinableS]

Is it wrong that I hoard BTC? I collect and receive tips for 25 cents and hoard it as if it will be worth $500+ in 5 years. Everytime I see someone say 10 bits, I am thinking $10 dollars in the future

[brg444]

Is it wrong that I hoard BTC? I collect and receive tips for 25 cents and hoard it as if it will be worth $500+ in 5 years. Everytime I see someone say 10 bits, I am thinking $10 dollars in the future

Hoarding is the way to go my friend.

[dinofelis]

Merchant adoption is not a fundamental of Bitcoin. The currency aspect will follow the store of value speculation and not the other way around.

I think we discussed this already, but store of value needs long-term trust.  Gold has a 5000 year record.  State bonds have century-level trust.  How do you think people will build up trust in bitcoin as a long-term stable store of value ?  Who would dare to buy $10,000.- coins to set aside for his retirement 30 years later ? 

But that's beside the point, the deflationary nature of Bitcoin encourages saving and discourages casual spending. Unlike the present fiat economy, savers are rewarded. People need to hoard it in order to create value.

Bitcoin is now inflationary like a real 3rd world country fiat: 10% a year nominally, but in fact much more as a lot of coins are in fact out of circulation for the moment.  It will take about 8 years before the inflationary nature of bitcoin will be of the order of the nominal Dollar and Euro price inflation.

People will not hoard huge amounts of value for a long time with such an uncertain future and in such an inflationary environment as compared to things like state bonds and gold.  The only reason to hoard coins is that one is speculating for "the moon" (low probability - high return). 

Monetary assets like gold historically first became currency, and only later, through the currency aspect for a long time and build-up trust, also a store of value.  I would like to see any reasoning that could indicate conservative pension funds wanting to invest a lot in bitcoin for a store of value over 20 years or so... 

[kutaka]

Anything more than 10k is unsustainable in current mining era. 100k coins? That would be a mining bonanza, I guess Intel ATI and other big players would join.

[dinofelis]

http://www.contravex.com/2014/02/25/matters-of-bitcoin-merchant-adoption/

The guy is showing himself:

Bitcoin, unlike fiat, demands that we delay gratification. For once. This can be confusing at first, but it’s a lesson we soon learn. I learned it last summer when I spent 3 BTC on a $450 case of wine in Kelowna. Today, I could’ve bought that case for 0.64 BTC, and probably more like 0.1 BTC before long, then 0.001 BTC, etc.

But you know that that can't last.  That's like a Ponzi.  Why would the "latecomers" enter bitcoin at high prices ?  You buy a coin at $400 because you hope for $10 000.-.  But why would you buy a $10 000.- coin ?  Hoping for $ 100 000.- ?  Ok who's going to buy $ 100 000.- coins ?  Hoping for $10 000 000.- ?   No.  So the guy won't buy the $ 100 000.- coins for his retirement.  Meaning the guy buying at $ 10 000.- won't find a buyer at $ 100 000.-.   ...

Something is a store of value if you take it that it will KEEP its value more or less, not that you speculate that it will significantly increase if that is the only drive.  Because that will obviously come to an and one day, like a Ponzi.

[plopper50]

Anything more than 10k is unsustainable in current mining era. 100k coins? That would be a mining bonanza, I guess Intel ATI and other big players would join.

Bitfury says "We also sell our hardware and hosting services to other large Bitcoin miners".

A bitfury article says

"BitFury Group, the leading Bitcoin infrastructure provider and Bitcoin transaction processing company has added Young Sohn, Samsung Electronics president and chief strategy officer, to its strategic advisory board".

http://www.finextra.com/news/announcement.aspx?pressreleaseid=57849&topic=payments

Is that a sign the big players are already getting interested?

[keystroke]

I think the halving will show the world that the coin is not something which is here for only a few short nights. It is a carefully designed economic mechanism designed to show its power to the world at key inflection points. The initial seeds were planted in the zeroth era. We are now in the first era and the sapling is taking root. It gains nourishment while remaining relatively unnoticed. Before long all will turn around and notice that its roots have grown into the bedrock of the electronic world. The halvings will play a role in this volatility as major economic events, scheduled like clockwork unlike the capricious order of old.

Then we party on the roofs of what once were banks.

[brg444]

Merchant adoption is not a fundamental of Bitcoin. The currency aspect will follow the store of value speculation and not the other way around.

I think we discussed this already, but store of value needs long-term trust.  Gold has a 5000 year record.  State bonds have century-level trust.  How do you think people will build up trust in bitcoin as a long-term stable store of value ?  Who would dare to buy $10,000.- coins to set aside for his retirement 30 years later ? 

But that's beside the point, the deflationary nature of Bitcoin encourages saving and discourages casual spending. Unlike the present fiat economy, savers are rewarded. People need to hoard it in order to create value.

Bitcoin is now inflationary like a real 3rd world country fiat: 10% a year nominally, but in fact much more as a lot of coins are in fact out of circulation for the moment.  It will take about 8 years before the inflationary nature of bitcoin will be of the order of the nominal Dollar and Euro price inflation.

People will not hoard huge amounts of value for a long time with such an uncertain future and in such an inflationary environment as compared to things like state bonds and gold.  The only reason to hoard coins is that one is speculating for "the moon" (low probability - high return). 

Monetary assets like gold historically first became currency, and only later, through the currency aspect for a long time and build-up trust, also a store of value.  I would like to see any reasoning that could indicate conservative pension funds wanting to invest a lot in bitcoin for a store of value over 20 years or so... 

They are doing so right now.

It is disingenuous to refer to Bitcoin as inflationary because of its emission schedule. It's current monetary base and limited supply creates more upside for growth than any comparative investements.

[brg444]

http://www.contravex.com/2014/02/25/matters-of-bitcoin-merchant-adoption/

The guy is showing himself:

Bitcoin, unlike fiat, demands that we delay gratification. For once. This can be confusing at first, but it’s a lesson we soon learn. I learned it last summer when I spent 3 BTC on a $450 case of wine in Kelowna. Today, I could’ve bought that case for 0.64 BTC, and probably more like 0.1 BTC before long, then 0.001 BTC, etc.

But you know that that can't last.  That's like a Ponzi.  Why would the "latecomers" enter bitcoin at high prices ?  You buy a coin at $400 because you hope for $10 000.-.  But why would you buy a $10 000.- coin ?  Hoping for $ 100 000.- ?  Ok who's going to buy $ 100 000.- coins ?  Hoping for $10 000 000.- ?   No.  So the guy won't buy the $ 100 000.- coins for his retirement.  Meaning the guy buying at $ 10 000.- won't find a buyer at $ 100 000.-.   ...

Something is a store of value if you take it that it will KEEP its value more or less, not that you speculate that it will significantly increase if that is the only drive.  Because that will obviously come to an and one day, like a Ponzi.

Yes it can last. That is what fixed supply assets do, grow in value as more people trust them to hold their value.

The guy buying at $100,000 obviously can not expect the same gains as earlier adopters but he can trust that he holds an assets that can not be confiscated through inflation and will reward saving instead of consumption.

Bitcoin is the ultimate store of value and the trust issue will be superceded by its spectacular growth soon enough.

[dinofelis]

Merchant adoption is not a fundamental of Bitcoin. The currency aspect will follow the store of value speculation and not the other way around.

I think we discussed this already, but store of value needs long-term trust.  Gold has a 5000 year record.  State bonds have century-level trust.  How do you think people will build up trust in bitcoin as a long-term stable store of value ?  Who would dare to buy $10,000.- coins to set aside for his retirement 30 years later ? 

But that's beside the point, the deflationary nature of Bitcoin encourages saving and discourages casual spending. Unlike the present fiat economy, savers are rewarded. People need to hoard it in order to create value.

Bitcoin is now inflationary like a real 3rd world country fiat: 10% a year nominally, but in fact much more as a lot of coins are in fact out of circulation for the moment.  It will take about 8 years before the inflationary nature of bitcoin will be of the order of the nominal Dollar and Euro price inflation.

People will not hoard huge amounts of value for a long time with such an uncertain future and in such an inflationary environment as compared to things like state bonds and gold.  The only reason to hoard coins is that one is speculating for "the moon" (low probability - high return). 

Monetary assets like gold historically first became currency, and only later, through the currency aspect for a long time and build-up trust, also a store of value.  I would like to see any reasoning that could indicate conservative pension funds wanting to invest a lot in bitcoin for a store of value over 20 years or so... 

They are doing so right now.

No, almost nobody is holding coins right now just to keep the value and to get that value back 20 years from now with the certainty that the value will more or less be held.

Almost everybody holding coins right now is hoping for a significant value increase.  If the reason for holding coins is value *increase* and not *value holding*, then the scheme will fail of course once the hope for value *increase* will stop - that is what I wanted to illustrate.

If you buy at $300, you can hope for $10 000.  But in order to sustain $10 000, something must change.  You cannot buy at $10 000, with the same incentives as buying at $300.  The hope to buy at $10 000, and to reach $3 000 000 is much lower I would think, than to buy at $300 and hoping for $10 000.  Moreover, the influx of value needed at $10 000 to support the money supply inflation is much larger than at $ 300.

If the buying and holding incentive is the huge increase in value, we are exactly on the same incentives as a Ponzi: it will fail at a certain point, because at a certain point, to sustain the price, the influx of value needed is too high, and the prospect of still higher prices becomes essentially nihil.  At that point the price will plummet, and all people having bought at $50 000 will panic-sell.

The only store of value has buying incentives without any expectation of significant increase in value.  If you buy gold, you are not hoping on a factor 30 of value increase in a few years.  You hope that it will keep its value (which means, higher price as compared to a devaluating fiat).  You may hope for slight increase, and you are not afraid of a small decrease.

Almost nobody is holding bitcoin to KEEP its value in my opinion.  If you would know that your coins will have doubled in price 10 years from now, you wouldn't hold your coins.  You're hoping for the moon.  But if you count on other people hoping for even more moon to get yours, it's going to crash, because that's exactly the drive of a ponzi.

If bitcoin were held as a store of value, then everybody should be happy if the price is almost constant, or would rise slowly to compensate for Dollar inflation.  Most hodlers don't hold bitcoin for that.

So they are NOT doing it right now.

[dinofelis]

Yes it can last. That is what fixed supply assets do, grow in value as more people trust them to hold their value.

The guy buying at $100,000 obviously can not expect the same gains as earlier adopters but he can trust that he holds an assets that can not be confiscated through inflation and will reward saving instead of consumption.

Bitcoin is the ultimate store of value and the trust issue will be superceded by its spectacular growth soon enough.

Sure, but to develop that trust, will take a *long* time.  If an asset has grown wildly from $10 to $100 000.- in a few years time, you take it normally that this is a high volatility, and that the opposite motion will be potentially just as quick.  You don't consider that as a store of value for the long term.

We've seen that last year, people have bought at $1200.- and end up a year later around $400.-  Do you think that after that example, people would buy in with a lot of money at $100 000.- ?
So what would convince anyone that if the price rose in 5 years time to $100 000.- that it can stay there for 20 years ?  Only by observing it for 20 years before engaging in it with serious money ! Which by itself will mean it cannot stay there !  And btw, all hodlers of today would try to cash in at such a price !

Again, this is different from the speculative market which is high risk, high gain which is the main driving force of the bitcoin price right now, but which only makes sense when the price is low of course !

This is why I think that bitcoin as a store of value at high prices is not possible in the near future.  If bitcoin would stay for 10 years at $400.- (and slightly rising to compensate for dollar devaluation) then people would start considering it as a store of value around that price. 

Bitcoin at $100 000.- because as store of value is imo not sustainable in the near future.

It is sustainable by (gigantic) merchant adoption on the other hand.

[NotLambchop]

...
They are doing so right now.

It is disingenuous to refer to Bitcoin as inflationary because of its emission schedule. It's current monetary base and limited supply creates more upside for growth than any comparative investements.

Bitcoin is currently inflationary.
The base is being inflated at ~10% per year--much faster than any self-respecting fiat currency.

Re. "upside":  BTCeanie BTCabies, like BTCitcoin, also have an upper limit.  Unlike BTCitcoin, that limit has already been reached [no more authentic BTCeanie BTCabies are being produced].  Thus, BTCeanie BTCabies are truly deflationary [authentic BTCeanie BTCabies can be destroyed, but not created]. 

Invest in & hoard BTCeanie BTCabies FTW!

[coinableS]

Do you think that after that example, people would buy in with a lot of money at $100 000.- ?
So what would convince anyone that if the price rose in 5 years time to $100 000.- that it can stay there for 20 years ?  Only by observing it for 20 years before engaging in it with serious money !

A lot of people might be seeing BTC as the stock market 2.0.
Big money entered the DJI portfolio despite a loss of 90% from $381 to $41. Crash after crash people have trusted their money in the stock market and portfolios and have retired off it. I don't think it's ridiculous to think that BTC could be similar.

 (http://stockcharts.com/freecharts/historical/djia19201940.html)

[hacknoid]

The guy is showing himself:

Bitcoin, unlike fiat, demands that we delay gratification. For once. This can be confusing at first, but it’s a lesson we soon learn. I learned it last summer when I spent 3 BTC on a $450 case of wine in Kelowna. Today, I could’ve bought that case for 0.64 BTC, and probably more like 0.1 BTC before long, then 0.001 BTC, etc.

But you know that that can't last.  That's like a Ponzi.  Why would the "latecomers" enter bitcoin at high prices ?  You buy a coin at $400 because you hope for $10 000.-.  But why would you buy a $10 000.- coin ?  Hoping for $ 100 000.- ?  Ok who's going to buy $ 100 000.- coins ?  Hoping for $10 000 000.- ?   No.  So the guy won't buy the $ 100 000.- coins for his retirement.  Meaning the guy buying at $ 10 000.- won't find a buyer at $ 100 000.-.   ...

Something is a store of value if you take it that it will KEEP its value more or less, not that you speculate that it will significantly increase if that is the only drive.  Because that will obviously come to an and one day, like a Ponzi.

You are assuming the only people that will buy are speculators and investors.  Imagine if in 5 years coins are worth $100K each.  If I am still paid in fiat at that time, my money would (still) go in a bank.  Now imagine banks have decided to get their feet wet and allow withdrawals in BTC.  I'll withdraw in BTC thank you very much so I can spend safely and securely, and carry it with me.  At that time there would likely be enough infrastructure that the company I buy from can get its supplies purchased in BTC as well, and so on.  So I spend 100 bits to buy a $10 gift online.  Now that $10 worth of bitcoin remains as such, rather than being sold back.

So I may very well be the one who "buys" the $100K bitcoin.  Or at least some of it.  Because this is the future that I can see...