More Bitcoin adoption = lower Bitcoin/Usd rate!

[altcoin hitler]

merchants dumping is good to help prevent bubbles. You greedy bastards just whine because you don't get a bubble now.

[TrollinU]

you cannot make any assuptions on true demand or true supply. or true value...

because the indicator you all only see is the price. and this price is so fake you dont realise it.

 I agree!

just look at the exchanges. they are not moving 13million coins. they are not even moving 1.3 million coins. they are not even moving 130k coins...

the exchanges are moving less than 1% of the market cap. infact its less than 1 tenth of a percent. so trying to link exchange movements to proper market trends of the whole 13million coins is utterly obsurd!!

open your eyes people, the exchanges should not be the value bases of bitcoin

I'm glad they don't move more volume of unique coins. If there were 13 million BTC on the ask side of exchanges, the real price would be $10. 
finex has around $20 million in USD swaps. That's good for $1.53/BTC. Even if they had 50 million Dollars it only brings it up to $3.84 so $10 might be a little generous.

[sobitcoin]

you cannot make any assuptions on true demand or true supply. or true value...

because the indicator you all only see is the price. and this price is so fake you dont realise it.

just look at the exchanges. they are not moving 13million coins. they are not even moving 1.3 million coins. they are not even moving 130k coins...

the exchanges are moving less than 1% of the market cap. infact its less than 1 tenth of a percent. so trying to link exchange movements to proper market trends of the whole 13million coins is utterly obsurd!!

open your eyes people, the exchanges should not be the value bases of bitcoin

The fact that the daily volume is a small portion of the market cap is irrelevant.  Price does reflect what people are willing to pay. 
You are off your rocker as far I'm concerned when you say the exchange price is somehow fake.

x2. Value is derived from demand. Demand for bitcoin is suggested from buy sell orders.  If the merchant adoption was on par with consumer adoption or mainstream adoption for other purposes, the price would rise.  I see a whole bunch of merchants accepting it, and a whole bunch of already bitcoin holders spending it.

[freedomno1]

I wrote this early 2014 and I think it is still relevant. The more adoption we see the lower Bitcoin/Usd will go!

http://razorsforex.blogspot.com/2014/02/bitcoin-adoption-bitcoin-price-stability.html

Well I was part of the camp that increasing Bitcoin adoption is a good thing in the long run but the conversions to FIAT immediately on any purchase keeps driving the price down as people do not hold Bitcoin for value
Until we switch from that turning point the price is pretty much stuck in a downtrend but as for how long that will take I expect it to end in 2015 although we haven't started off that well yet.

[inca]

you cannot make any assuptions on true demand or true supply. or true value...

because the indicator you all only see is the price. and this price is so fake you dont realise it.

just look at the exchanges. they are not moving 13million coins. they are not even moving 1.3 million coins. they are not even moving 130k coins...

the exchanges are moving less than 1% of the market cap. infact its less than 1 tenth of a percent. so trying to link exchange movements to proper market trends of the whole 13million coins is utterly obsurd!!

open your eyes people, the exchanges should not be the value bases of bitcoin

Hence when something with real market depth appears fake Chinese exchanges will entirely cease to have any meaningful push or pull on the exchange price.

A new liquid ETF or a regulated US exchange are my bets.

[freebit13]

If you go back and count from the beginning, you'll notice that the price has increased with adoption... how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.

Everyone seems to be using arbitrary starting points that support their ideas.

[dinofelis]

I wrote this early 2014 and I think it is still relevant. The more adoption we see the lower Bitcoin/Usd will go!

http://razorsforex.blogspot.com/2014/02/bitcoin-adoption-bitcoin-price-stability.html

Theoretically, yes, and no.

There are two potential fundamentals for a thing like bitcoin: "store of value" (like gold) and "currency" (like fiat).  Of course, there is an overlap between both, but currency essentially serves to buy goods and services, while "store of value" is a kind of a proxy to a currency, that serves to transport value over (longer) times.  Both are the functions of a monetary asset, whose equilibrium value is given by the monetary formula P x Q = M x V.

However, the price of bitcoin at this point is determined by 3, and not 2, elements, because bitcoin is still pretty new.  The 3 elements are:
- currency (to buy stuff with) - mainly black market, but starts now to become something with merchant adoption
- store of value on the longer term (to transport current value in the future, such as saving for your retirement)
- speculation of higher fundamentals in the future: the MAIN drive of the price: the attraction of the bitcoin moon :-)

Bitcoin's price is mainly driven at this moment by speculation of "greater fool".  This is why many people compare it to a Ponzi or pyramid scheme.  However, there's nothing wrong with that: any new would-be currency has to go through that phase.  However, this is of course the most volatile part, as it is not a fundamental itself, but an expectation of a future fundamental, which goes with good and bad news, mood, emotion and everything that affects expectation of the future.

The merchant adoption has to do with the "currency" fundamental.  However, as long as merchant adoption is only part of a scheme:
fiat - bitcoin - buying with bitcoin - conversion to fiat, the VELOCITY of bitcoin is very high. That, combined with a low volume of value (Q), makes the price in bitcoin high (the value of bitcoin low).

This fundamental is still pretty low.

The store of value for the long run without speculative "moon" expectation is probably very low too at this moment.  Bitcoin it, compared to other stores of value such as gold or real estate, much too risky and volatile.  It is much more volatile than the stock market !

So the current fundamentals of bitcoin point to a very low price.  The actual price is essentially speculation of higher fundamentals in the future, which can erode quickly.

However, the real road in my opinion is merchant adoption.  Of course, as long as it is only RETAILER adoption, this will result in immediate conversion into fiat, high velocity, and hence very low bitcoin value.  But from the moment that other merchants also accept bitcoin, retailers will probably accept bitcoin and PAY with bitcoin themselves : there's no point in converting to fiat, and converting back to bitcoin.

When retailers will start KEEPING coins to pay THEIR providers in coin, then velocity will diminish, Q will rise (the intermediate goods will also be paid in bitcoin and add to Q), and bitcoin's currency fundamental will start rising.

But the phase of retailer adoption and conversion into fiat, with low bitcoin fundamental value, is part of the adoption road.

[traderman]

I think for 2015 it will be the same thing, retailers selling their stashes unless Bitcoiners stop spending their bitcoins. If that happens we may start to see a turn around. The lower the BTC/USD exchange rate goes the less appealing it is to spend your Bitcoin. So it is also possible we see a reversal!

[dinofelis]

I think for 2015 it will be the same thing, retailers selling their stashes unless Bitcoiners stop spending their bitcoins. If that happens we may start to see a turn around. The lower the BTC/USD exchange rate goes the less appealing it is to spend your Bitcoin. So it is also possible we see a reversal!

Yes, but that means that there is a feedback mechanism that establishes a stable, low, price.  Indeed, that's what's called a fundamental !  If the price rises somewhat, people will sell out coins to cash in on the rise.  If the price falls somewhat, people will not buy stuff with cheap coins, but will acquire some coins which are cheap now (from a fiat point of view).

The price will then be determined by the equilibrium of offer and demand to buy stuff with, which is exactly what the monetary formula gives you.   Point is, we are probably in the single or double digit area.  It would mean that the speculation for higher future fundamentals essentially stopped.  Nobody would think anymore that bitcoin would go to the moon, but would think that bitcoin reached maturity and a more or less stable price, with no advantage to hold bitcoin any longer than the time needed to acquire them and to spend them.  With some incentive to buy when price is low, and some incentive to spend them when price is high, which is a stabilizing feedback mechanism.

The way for the bitcoin price to rise then again is two-fold:
1) more adoption (meaning: more stuff is bought with bitcoin, which implies a proportional rise in its price)
2) THE big thing in my mind: when suppliers (and maybe even people receiving a salary) start accepting bitcoin.  It would mean that after an acquisition, the vendor will not convert systematically anymore to fiat but can hold a part of his coins to pay HIS bills.

[arvis]

merchants dumping is good to help prevent bubbles. You greedy bastards just whine because you don't get a bubble now.

There will be a bubble.... eventually.

[NotLambchop]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

Nothing to do with adoption.  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

[traderman]

I think once the boys on wallstreet get those Bitcoin ETFs up then we can look forward to bubble world. Till then, we will slowly drift lower. The one other thing that might spark a Bitcoin rally is financial system instability in Europe/USA or any other developed country. Once people get spooked they will run towards something, and I bet Bitcoin will be one such safe haven.

merchants dumping is good to help prevent bubbles. You greedy bastards just whine because you don't get a bubble now.

There will be a bubble.... eventually.

[dinofelis]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

Nothing to do with adoption.  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

The point is that the "greater fool" basis is not a fundamental.   It has been the main driving force for the bitcoin price in recent times.
However, merchant adoption IS a fundamental.  I'm not sure that before the 2013 peaks, merchant (black market) adoption wasn't really the fundamental that drove at least partly the price.

Point is that the "greater fool" speculation has driven the price so much up that it left the current fundamentals far behind.  And I'm not even sure that the black market fundamental didn't decrease a lot (bitcoin has become too visible to law enforcement).

The 'greater fool' drive always crashes in the end.  But true fundamentals can exist.  My guess is that the current fundamentals of bitcoin are in the single or double digit range.  This can only seriously increase by massive adoption.  But that will take time.

In the mean time, nothing stops people from playing the "greater fool" game :-)

[freebit13]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

...  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

There you go with your assumptions again... I can't help that you got into bitcoin for the wrong reasons, that is not the reason I got into bitcoin and that's probably why I'm doing so well 

[NotLambchop]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

...  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

There you go with your assumptions again... I can't help that you got into bitcoin for the wrong reasons, that is not the reason I got into bitcoin and that's probably why I'm doing so well 

The only way you could have made money with Bitcoin is by selling it.  If you have, my apologies and congratulations for getting out in time.

[seleme]

Adoption is sign of BTC's earned legitimacy and it is calculated into the price in 2013. That's why we are talking about low sub-300, and not low sub-10 prices.

[freebit13]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

...  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

There you go with your assumptions again... I can't help that you got into bitcoin for the wrong reasons, that is not the reason I got into bitcoin and that's probably why I'm doing so well 

The only way you could have made money with Bitcoin is by selling it.  If you have, my apologies and congratulations for getting out in time.

What I did was realise the potential of bitcoin after doing some real investigation into the technology (whitepaper etc.) and when the price went up I bought mining equipment to support the network because I believe in the technology; I'm not just after profits. 2 weeks ago I also bought 3 trezor wallets in order to support those supporting the community and technology and I will continue to do so.

My aim is not to use bitcoin to trade for cash (that shouldn't be necessary), I will only use it to buy things or as a long-term store of value because that's what it's meant for. I learned a long time ago that if you do things for the right reasons they have a funny way of working out for you.

[traderman]

I am in full agreement. Bitcoin's value should not be based on fiat, Bitcoin was meant to replace it. Honest money!

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

...  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

There you go with your assumptions again... I can't help that you got into bitcoin for the wrong reasons, that is not the reason I got into bitcoin and that's probably why I'm doing so well 

The only way you could have made money with Bitcoin is by selling it.  If you have, my apologies and congratulations for getting out in time.

What I did was realise the potential of bitcoin after doing some real investigation into the technology (whitepaper etc.) and when the price went up I bought mining equipment to support the network because I believe in the technology; I'm not just after profits. 2 weeks ago I also bought 3 trezor wallets in order to support those supporting the community and technology and I will continue to do so.

My aim is not to use bitcoin to trade for cash (that shouldn't be necessary), I will only use it to buy things or as a long-term store of value because that's what it's meant for. I learned a long time ago that if you do things for the right reasons they have a funny way of working out for you.

[NotLambchop]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

...  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

There you go with your assumptions again... I can't help that you got into bitcoin for the wrong reasons, that is not the reason I got into bitcoin and that's probably why I'm doing so well  

The only way you could have made money with Bitcoin is by selling it.  If you have, my apologies and congratulations for getting out in time.

What I did was realise the potential of bitcoin after doing some real investigation into the technology (whitepaper etc.) and when the price went up I bought mining equipment to support the network because I believe in the technology; I'm not just after profits. 2 weeks ago I also bought 3 trezor wallets in order to support those supporting the community and technology and I will continue to do so.

My aim is not to use bitcoin to trade for cash (that shouldn't be necessary), I will only use it to buy things or as a long-term store of value because that's what it's meant for. I learned a long time ago that if you do things for the right reasons they have a funny way of working out for you.

Aha.  I think our disagreement is rooted in semantics:  Your definition of "making money" differs from the conventional.  By "making money," mundanes such as myself mean "ending up with more money than one started with."
You, OTOH, have spent money on Bitcoin gadgetry, ending up with less of it.  Or, as us bland normals say, you've lost money.

Now that we've defined our terms, we can continue our chat on much firmer footing

[sobitcoin]

...how do you explain the first few years? It was worth only a fraction of a cent and now it's over $260.
...

Nothing to do with adoption.  I've invested in Bitcoin because I was betting that someone (such as yourself) will buy my coin from me @ a higher price.  So did everyone else who has made money on Bitcoin.

Really? I don't know if you can speak for everyone else.  I adopted it for seamless online poker transactions, purchase it when I need it, and have never really heald longer then a few weeks, but have been lucky buying at the right times. Not sure where you have found the encouragement to speak on behalf of everyone who made money off bitcoin, but I can imagine some people were holding bitcoin for it's utility, while the price went up, which was probably awesome and enjoyed, but a generalization would be to say everyone who made money on it originally bought it as an investment, doubtful, there is lots of people here who have other uses, although they probably don't mind making a few bucks while holding it either.