Why did bitcoin jump up in price so suddenly in the past 2 weeks?

[Newar]

Just after the news that BFL ASIC is coming

ASIC miners will increase the whole network hashing power a lot (so does difficulty), this will dramatically reduce the availability for BTC for average person, so either they invest in ASIC miner or use those money to buy BTC now

Agreed. The ASIC miners will hoard bitcoins because less will be generated through mining as difficulty rises and block havling occurs.

How so? My understanding is that there is a block every ~ ten minutes which contains (currently) 50 BTC. Difficulty is the measure that this stays more or less the same.

I agree on the block halving possibly increasing the price.

[johnyj]

Just after the news that BFL ASIC is coming

ASIC miners will increase the whole network hashing power a lot (so does difficulty), this will dramatically reduce the availability for BTC for average person, so either they invest in ASIC miner or use those money to buy BTC now

Agreed. The ASIC miners will hoard bitcoins because less will be generated through mining as difficulty rises and block havling occurs.

How so? My understanding is that there is a block every ~ ten minutes which contains (currently) 50 BTC. Difficulty is the measure that this stays more or less the same.

I agree on the block halving possibly increasing the price.

A single ASIC rack can stands for about 8% of the total network hash power today, this means if there are 13 of such rig, then the difficulty will double. So either normal user invest in ASIC equipment or get nothing at all by mining using GPU

Today a great amount of hash power is distributed evenly between many gamers and GPU retailers, but when ASIC take over, the BTC will be concentrate to a small amount of people, thus decrease the supply dramatically

But I think that is a bad trend, sooner or later the coin generation will be centralized to some people who are interested in investing big to establish ASIC farms, then they will more or less affect the money supply as the same way as FED (if they spend BTC, then money supply will increase, if they hoard, BTC supply will decrease), but in a much less efficient manner, FED do not need to hash to generate coin anyway

[unclemantis]

As hording continues then the price of BTC will continue to rise?

[runlinux]

Supply and demand. Big players have a demand.

[Fjordbit]

A single ASIC rack can stands for about 8% of the total network hash power today, this means if there are 13 of such rig, then the difficulty will double. So either normal user invest in ASIC equipment or get nothing at all by mining using GPU

Today a great amount of hash power is distributed evenly between many gamers and GPU retailers, but when ASIC take over, the BTC will be concentrate to a small amount of people, thus decrease the supply dramatically

But I think that is a bad trend, sooner or later the coin generation will be centralized to some people who are interested in investing big to establish ASIC farms, then they will more or less affect the money supply as the same way as FED (if they spend BTC, then money supply will increase, if they hoard, BTC supply will decrease), but in a much less efficient manner, FED do not need to hash to generate coin anyway

This doesn't seem to matter that much to me. First of all, GPU miners need to sell more in order to cover their electricity costs. This and the heat is the reason I stopped GPU mining (although with the price as high as it is, I am considering firing them up) for my FPGAs.

But at this point in time, it doesn't matter if miners sell every single coin they mint. Over the next year, the amount of bitcoin will only rise by 19%. I'm fairly confident that in that year we will have more than 19% growth in the economy (meaning the number of people using it and the amount of goods and services being sold). This will points to an increase in price over this time. And that assumes no hoarding, which is a pretty bad assumption.

[johnyj]

But at this point in time, it doesn't matter if miners sell every single coin they mint. Over the next year, the amount of bitcoin will only rise by 19%. I'm fairly confident that in that year we will have more than 19% growth in the economy (meaning the number of people using it and the amount of goods and services being sold). This will points to an increase in price over this time. And that assumes no hoarding, which is a pretty bad assumption.

Cheap currency will drive out expensive currency, people hoard BTC, and spend USD, so there will be less and less trade done by BTC. I expect that there will be BTC backed cash appear, back to the old banking system

[Aseras]

all the asic miners are going to have to sell their BTC however to pay for the rigs.

However long term after a while btc wont need to be sold to pay for power and computers and maintenance as they are now with gpu.

[kano]

My pure speculation theory, based in no market reality other than human nature: I suspect human beings like things in "nice packages" including valuations.

I feel that the hover at 5.xx was nothing more than wanting to value the BTC at a fair & solid constant. High stability around values divisible by 5 and 2. After a few more weeks of cycling, I suspect we'll sit at $8 for a while before hitting $10.

Now that I have predicted this, it will never happen.

Nah, that couldn't be right

[Kumala]

Maybe Syria and Iran are using Bitcoins to circumvent Banking Sanctions or save their assets so they cant be frozen? Will the OPEC countries sell oil in Bitcoins in the future in order to avoid any possible international monetory sanctions when their governments fall out of favour?

[bitcon]

if you had chickenpox, the shingles virus is already inside you.

[benjamindees]

but in a much less efficient manner, FED do not need to hash to generate coin anyway

The FED today wastes billions of dollars a year in resources maintaining their system.  Bitcoin is orders of magnitude more efficient.

I really should not have to continue pointing this out.

[layyen]

from 15usd back to 10.7... do anybody know the reason ? i thinked that ti price went up because of its slow preparation for reward halving, and there wont be any suddenly jump up..

[Mashrock]

the volume is rather high so that would have a fair bit to do with it.

[bitcon]

Here is why:http://alturl.com/5c8a6

This is not an explanation this is an attempt to fuel another bubble. But it won't be a remake of june 2011. Why? Because the market is much more stable than before, much more multi-currency, people remember the bubble from last year and start selling each time bitcoin price increases.

So I think there will be a steady growth, matching the growth of the economy, slowly, but not a fly to the moon bubble where a bitcoin is worth 1000 in 2 months. Sorry.

As for the last two weeks, there are multiple signs that bitcoin is catching up in various markets, there an afflux of new bitcoiners from all over the world (or at least of funds from all over the world), hence the rise.

you call dropping $5 in less than 48 hours "stable"?

[DobZombie]

Yeah wtf?!? 30% of my wealth just went away!

I'd panic sell right now if I was a retard

[JupeB]

For the price of Bitcoin in USD to drop, someone had to dump a lot of Bitcoin on the market - what are the chances that it was BFL? They have suppliers, engineers, etc that need payment in government fiat, so when bills come due for their new project, they have to liquidate some of their Bitcoin holdings from the ASIC pre-order.

[mobodick]

I made a post about 6 months ago that attempted to explain what I saw happening in the Bitcoin world here:
https://bitcointalk.org/index.php?topic=53949.40

I forecasted pretty steady growth, which we've mostly seen. But there are a number of other factors that have arisen since that time.

Bitcoin is getting more secure
One, the fact that more and more FPGAs are being purchased and that ASIC is being talked about means that a government or large financial institution 51% attack on the Bitcoin network is going to get significantly more difficult to implement. The value being put in to prevent such an attack actually increases the value of a Bitcoin itself. At some point it will be widely recognized that it is impossible for any single entity to establish a 51% attack on the network.

Once that happens, the value of a Bitcoin will be based directly on its inherent function as: a medium of exchange, a unit of account (divisible and fungible), a store of value, a standard of deferred payment, and a measure of value.

Right now there is still some question as to whether or not one institution or individual will attempt to "corner the market" on mined coin, thus making all of the above significantly more difficult to assess with regards to Bitcoin, however it is getting less likely ever day. I imagine that continued security over time means demand has been increasing for Bitcoin slightly faster than the 7200/day rate at which they are being added to the network.

Mining is becoming a more mature business
Supply might also be tightening as more miners are factoring in December's reward-halving into their return on investment (ROI), meaning they are far less willing to sell at lower prices. Coupled with the increased security and other options for spending coin within the network as opposed to simply "cashing out", more miners are seeing the benefits of delaying a sale right now. At some point the bulk of their stored coin may get sold en masse, though, and we could *could* potentially see the price head back down. There have also been some slightly delays will selling coin via the largest exchange, so some miners have chosen other exchanges or alternative methods.

More options for keeping Bitcoins within the network now exist
GLBSE is a great example of a Bitcoin "sink" to a certain extent. While many people who obtain dividends from companies listed on GLBSE are choosing to sell their coin, many simply considered those investments a sunk cost and simply reinvest, thus keeping the money within the network. While the operator of a mining company does have to purchase hardware, and thus has to sell the coin, they are doing so in a much more delayed manner than previously, and their shareholders may not be approving them to spend coin as readily.

There are simply more people playing the game
Every new business or Bitcoin user also becomes a Bitcoin "sink" as they probably want to hold or have some coin on hand at all times relative to their interest. Many of them may sell immediately to pay off USD-denominated debt, but with banking and lending institutions now handling some of this within Bitcoin, others may need to buy in order to fulfill obligations. As interest increases, more and more of these users are active and more and more want to hold or have coin on hand.

I guess we'll see over time if increases remain steady, but I suspect to continue to see it do so as more and more people use it more and more regularly.

You're blinded by your optimism...

[kilcondlost]

Bitcoins are now down to $9.00 each so much for the jump. All it takes is one little scare and then there enacts a chain reaction. BTCS&T fell which scared people so there was a run on bitcoins at which time pop goes the weasel.

[enquirer]

but in a much less efficient manner, FED do not need to hash to generate coin anyway

The FED today wastes billions of dollars a year in resources maintaining their system.  Bitcoin is orders of magnitude more efficient.

I really should not have to continue pointing this out.

FED wastes billions of dollars a year maintaining their system, but it is only a small % of USD in circulation. Bitcoin, to be secure, requires to spend 51% of the value of all Bitcoins in circulation on infrastructure.

[unclescrooge]

I don't think the recent event reflect the general trend or the demand for bitcoins