Bitcoin price will reach $25 by the end of the year

[dacoinminster]

Bitcoin will clear far more than $25, although whether it does so by the end of the year is anybody's guess.

Here's why bitcoin price increases are just getting started:


The infographic is part of a larger presentation on the potential of bitcoin which I made.

[ElectricMucus]

Bitcoin will clear far more than $25, although whether it does so by the end of the year is anybody's guess.

Here's why bitcoin price increases are just getting started:


The infographic is part of a larger presentation on the potential of bitcoin which I made.

You realize that forex volume isn't any real currency in any sense don't you? It just trade volume.
That makes your graphic deceptive to the unknowing reader.

[evoorhees]

If anyone wants to know why the Bitcoin price is going up or down during a certain period, I'd advise you to ignore everything related to mining completely (with a small caveat that the block reward halving will reduce supply a bit and this will have a subtle effect on price).

Anyone who claims that bitcoin is rising or falling because of X reason related to mining, or ASICs, or BFL, etc etc... is fundamentally misunderstanding Bitcoin.

With that said, I think $25 price at the end of the year is totally realistic, perhaps likely. But it's got nothing to do with mining

[Energizer]

If anyone wants to know why the Bitcoin price is going up or down during a certain period, I'd advise you to ignore everything related to mining completely (with a small caveat that the block reward halving will reduce supply a bit and this will have a subtle effect on price).

Anyone who claims that bitcoin is rising or falling because of X reason related to mining, or ASICs, or BFL, etc etc... is fundamentally misunderstanding Bitcoin.

With that said, I think $25 price at the end of the year is totally realistic, perhaps likely. But it's got nothing to do with mining

So why is it rising then?

[notme]

If anyone wants to know why the Bitcoin price is going up or down during a certain period, I'd advise you to ignore everything related to mining completely (with a small caveat that the block reward halving will reduce supply a bit and this will have a subtle effect on price).

Anyone who claims that bitcoin is rising or falling because of X reason related to mining, or ASICs, or BFL, etc etc... is fundamentally misunderstanding Bitcoin.

With that said, I think $25 price at the end of the year is totally realistic, perhaps likely. But it's got nothing to do with mining

So why is it rising then?

More users, more businesses, more confidence, and we're still nowhere near our potential.

[adamstgBit]

If anyone wants to know why the Bitcoin price is going up or down during a certain period, I'd advise you to ignore everything related to mining completely (with a small caveat that the block reward halving will reduce supply a bit and this will have a subtle effect on price).

Anyone who claims that bitcoin is rising or falling because of X reason related to mining, or ASICs, or BFL, etc etc... is fundamentally misunderstanding Bitcoin.

With that said, I think $25 price at the end of the year is totally realistic, perhaps likely. But it's got nothing to do with mining

So why is it rising then?

this may be hard to understand but

the price is rising because 25$ by the end of the year is totally realistic,
and
because the price is rising,  25$ by the end of the year is totally realistic,

 

If anyone wants to know why the Bitcoin price is going up or down during a certain period, I'd advise you to ignore everything related to mining completely (with a small caveat that the block reward halving will reduce supply a bit and this will have a subtle effect on price).

Anyone who claims that bitcoin is rising or falling because of X reason related to mining, or ASICs, or BFL, etc etc... is fundamentally misunderstanding Bitcoin.

With that said, I think $25 price at the end of the year is totally realistic, perhaps likely. But it's got nothing to do with mining

So why is it rising then?

More users, more businesses, more confidence, and we're still nowhere near our potential.

forget my troll post above this it the reason....
I'm in a weird mood today ... could it be... I'm ... turning into a bear

[mp420]

I think bitcoin's "fair" value (which stems from its usability and rate of adoption) is roughly correlated with Tx/Block. This does not need to grow all that much to be knocking on the current protocol limits.

I'm kind of concerned about the developers not taking scalability seriously. I'm strongly of the opinion that any Moore's law related arguments against improving the scalability are seriously flawed.

[yogi]

I think bitcoin's "fair" value (which stems from its usability and rate of adoption) is roughly correlated with Tx/Block. This does not need to grow all that much to be knocking on the current protocol limits.

I'm kind of concerned about the developers not taking scalability seriously. I'm strongly of the opinion that any Moore's law related arguments against improving the scalability are seriously flawed.

This is also my sentiment.

Are there any other developers out there who would be willing to help develop a scalable protocol?

[adamstgBit]

I think bitcoin's "fair" value (which stems from its usability and rate of adoption) is roughly correlated with Tx/Block. This does not need to grow all that much to be knocking on the current protocol limits.

I'm kind of concerned about the developers not taking scalability seriously. I'm strongly of the opinion that any Moore's law related arguments against improving the scalability are seriously flawed.

This is also my sentiment.

Are there any other developers out there who would be willing to help develop a scalable protocol?

you'd need a big team
first making the new protocol itself is a huge job
second you'd need a top notch exchange site to even think about competing with bitoin

if done right, and you come out with a truly and easily scalable version of bitcoin ..... I'd be buying in, BIG TIME

but are the developers really not taking scalability seriously?

[ice_chill]

I too think it is rising because there have been orders for ASIC worth several million USD, and many paid using Bitcoin, which has driven it's price up a little.
But I doubt it would go above $15 by year's end.

[Energizer]

Actually its vice versa: Any one who claims that the rise in the price has no relation with mining, ASIC, FPGA, BFL, ... is totally misunderstanding Bitcoin Why?

The price of Bitcoin is usually related at a certain level to the expenses involved in producing 1 BTC. Thus it is strongly related to difficulty and the ROI of the mining hardware. If you can buy a mining device that has a ROI of 4 to 8 months, so immediately Bitcoin price adjusts to such value. No one would buy BTC @ 20$ where he can buy a device for 400$ to 600$  that has a ROI of 4 to 8 months. Also difficulty plays a big rule here. The easier it is to mine 1 BTC the lower value its gonna be traded, and when difficulty and ROI of hardware rises "which is the situation with ASIC", only then BTC price can start to rise.

What makes me confident about BTC price reaching 25$ by the end of 2012 beginning of 2013 is that when ASIC hits the network the ROI of any FPGA device will turn into 3 to 5 years instead of ~6 months. And with the 25 BTC block reward, the ROI of ASIC devices would be more than 12 months. So the price of BTC will adjust according to these facts "whenever it happen" to turn ROI of ASIC into an acceptable level of around "6 months".

[notme]

Actually its vice versa: Any one who claims that the rise in the price has no relation with mining, ASIC, FPGA, BFL, ... is totally misunderstanding Bitcoin Why?

The price of Bitcoin is usually related at a certain level to the expenses involved in producing 1 BTC. Thus it is strongly related to difficulty and the ROI of the mining hardware. If you can buy a mining device that has a ROI of 4 to 8 months, so immediately Bitcoin price adjusts to such value. No one would buy BTC @ 20$ where he can buy a device for 400$ to 600$  that has a ROI of 4 to 8 months. Also difficulty plays a big rule here. The easier it is to mine 1 BTC the lower value its gonna be traded, and when difficulty and ROI of hardware rises "which is the situation with ASIC", only then BTC price can start to rise.

What makes me confident about BTC price reaching 25$ by the end of 2012 beginning of 2013 is that when ASIC hits the network the ROI of any FPGA device will turn into 3 to 5 years instead of ~6 months. And with the 25 BTC block reward, the ROI of ASIC devices would be more than 12 months. So the price of BTC will adjust according to these facts "whenever it happen" to turn ROI of ASIC into an acceptable level of around "6 months".

No one would buy instead of mining except the 95% of the population who doesn't have a clue about the hardware/software necessary to mine.  Sure, it's easy, but people don't like to learn when there is another path.

[blablahblah]

Actually its vice versa: Any one who claims that the rise in the price has no relation with mining, ASIC, FPGA, BFL, ... is totally misunderstanding Bitcoin Why?

The price of Bitcoin is usually related at a certain level to the expenses involved in producing 1 BTC. Thus it is strongly related to difficulty and the ROI of the mining hardware. If you can buy a mining device that has a ROI of 4 to 8 months, so immediately Bitcoin price adjusts to such value. No one would buy BTC @ 20$ where he can buy a device for 400$ to 600$  that has a ROI of 4 to 8 months. Also difficulty plays a big rule here. The easier it is to mine 1 BTC the lower value its gonna be traded, and when difficulty and ROI of hardware rises "which is the situation with ASIC", only then BTC price can start to rise.

What makes me confident about BTC price reaching 25$ by the end of 2012 beginning of 2013 is that when ASIC hits the network the ROI of any FPGA device will turn into 3 to 5 years instead of ~6 months. And with the 25 BTC block reward, the ROI of ASIC devices would be more than 12 months. So the price of BTC will adjust according to these facts "whenever it happen" to turn ROI of ASIC into an acceptable level of around "6 months".

You've got it completely backwards. Miners switch on or off their mining gear depending on the price. If whatever technology they use happens to be unprofitable because the exchange rate is too low, then there's no point switching it on and losing money. And Vice Versa: if Bitcoin becomes more expensive, more miners re-activate their mining gear as a consequence of the price. Sure, if ASICs are suddenly introduced and a huge number of cheaply-made made bitcoins are put onto the market, then yes, the price is likely to drop... for a maximum of 2 weeks. But after that time the difficulty will increase and bring the costs back up.

[evoorhees]

Actually its vice versa: Any one who claims that the rise in the price has no relation with mining, ASIC, FPGA, BFL, ... is totally misunderstanding Bitcoin Why?

The price of Bitcoin is usually related at a certain level to the expenses involved in producing 1 BTC.

Many people believe this. It's nonsense. Consider the expenses required in producing one bucket of fine sand from the bottom of the ocean floor. This sand would cost thousands of dollars to bring to market. How much will the sand be worth? It won't be worth anything, because nobody wants it. It is not useful. 

Bitcoin's price comes not from the cost of producing it, but from the ever-changing balance of supply and demand of the coins. The price is far more reliant on "how useful the world finds Bitcoin to be" and far less reliant on "how much it costs to make a new one."

The supply of newly mined coins is constant (7200 per day right now). No amount of new mining technology, or new interest in mining, will ever change this new supply rate. When the rate halves in December, perhaps the price will be higher due to somewhat smaller supply (remember new coins are only a part of supply at any given time), but again this has nothing at all to do with mining.

The only way that mining would significantly influence Bitcoin price is if it changed the rate of coin production. And in this case, the new technology would make greater supply, and thus push the bitcoin price down, not up.

Thus it is strongly related to difficulty and the ROI of the mining hardware. If you can buy a mining device that has a ROI of 4 to 8 months, so immediately Bitcoin price adjusts to such value. No one would buy BTC @ 20$ where he can buy a device for 400$ to 600$  that has a ROI of 4 to 8 months. Also difficulty plays a big rule here. The easier it is to mine 1 BTC the lower value its gonna be traded, and when difficulty and ROI of hardware rises "which is the situation with ASIC", only then BTC price can start to rise.

What makes me confident about BTC price reaching 25$ by the end of 2012 beginning of 2013 is that when ASIC hits the network the ROI of any FPGA device will turn into 3 to 5 years instead of ~6 months. And with the 25 BTC block reward, the ROI of ASIC devices would be more than 12 months. So the price of BTC will adjust according to these facts "whenever it happen" to turn ROI of ASIC into an acceptable level of around "6 months".

^all of the above is irrelevant, given my prior statement

[Energizer]

Actually its vice versa: Any one who claims that the rise in the price has no relation with mining, ASIC, FPGA, BFL, ... is totally misunderstanding Bitcoin Why?

The price of Bitcoin is usually related at a certain level to the expenses involved in producing 1 BTC.

Many people believe this. It's nonsense. Consider the expenses required in producing one bucket of fine sand from the bottom of the ocean floor. This sand would cost thousands of dollars to bring to market. How much will the sand be worth? It won't be worth anything, because nobody wants it. It is not useful.  

Bitcoin's price comes not from the cost of producing it, but from the ever-changing balance of supply and demand of the coins. The price is far more reliant on "how useful the world finds Bitcoin to be" and far less reliant on "how much it costs to make a new one."

The supply of newly mined coins is constant (7200 per day right now). No amount of new mining technology, or new interest in mining, will ever change this new supply rate. When the rate halves in December, perhaps the price will be higher due to somewhat smaller supply (remember new coins are only a part of supply at any given time), but again this has nothing at all to do with mining.

The only way that mining would significantly influence Bitcoin price is if it changed the rate of coin production. And in this case, the new technology would make greater supply, and thus push the bitcoin price down, not up.

Thus it is strongly related to difficulty and the ROI of the mining hardware. If you can buy a mining device that has a ROI of 4 to 8 months, so immediately Bitcoin price adjusts to such value. No one would buy BTC @ 20$ where he can buy a device for 400$ to 600$  that has a ROI of 4 to 8 months. Also difficulty plays a big rule here. The easier it is to mine 1 BTC the lower value its gonna be traded, and when difficulty and ROI of hardware rises "which is the situation with ASIC", only then BTC price can start to rise.

What makes me confident about BTC price reaching 25$ by the end of 2012 beginning of 2013 is that when ASIC hits the network the ROI of any FPGA device will turn into 3 to 5 years instead of ~6 months. And with the 25 BTC block reward, the ROI of ASIC devices would be more than 12 months. So the price of BTC will adjust according to these facts "whenever it happen" to turn ROI of ASIC into an acceptable level of around "6 months".

^all of the above is irrelevant, given my prior statement

Suppliers can not go lower than the ROI of 12 months of the mining cost "thats why BTC didn't drop lower than ~2$", and can not go higher than the ROI of 3 to 4 months of mining cost "thats why BTC highest traded price during the last year was ~7.2". But today the equation has changed with the ASIC expected delivery date! GPU and FPGA miners has to return the investment in a shorter time frame. Such time frame is geting shorter every single day.

[Energizer]

Bitcoin's price comes not from the cost of producing it, but from the ever-changing balance of supply and demand of the coins. The price is far more reliant on "how useful the world finds Bitcoin to be" and far less reliant on "how much it costs to make a new one."

Mining cost + difficulty indeed affect the supply!

The supply of newly mined coins is constant (7200 per day right now). No amount of new mining technology, or new interest in mining, will ever change this new supply rate. When the rate halves in December, perhaps the price will be higher due to somewhat smaller supply (remember new coins are only a part of supply at any given time), but again this has nothing at all to do with mining.

The only way that mining would significantly influence Bitcoin price is if it changed the rate of coin production. And in this case, the new technology would make greater supply, and thus push the bitcoin price down, not up.

The total amount of mined BTC daily is constant "nothing is gonna change that". Thats why difficulty increases with every single GH added to the network. If you can mine 1 btc a day @ difficulty 1000, you would need 2 days to mine 1 btc @ difficulty 2000. If you can mine 1 BTC a day @ the current difficulty, with the same hashing power it would require at least 20 days to mine 1 BTC when ASIC hits the network. Still the total amount of the network daily mined BTC will remain the same. Most of the mined BTC by then will go to ASIC farms. What I wanna point here is that there will be great changes in the supply chain. Realizing such fact today, makes bitcoiners evaluate their currently owned bitcoins at a higher value, and increases the market demand on buying BTC before it crosses 10$.

[mobodick]

Suppliers can not go lower than the ROI of 12 months of the mining cost "thats why BTC didn't drop lower than ~2$", and can not go higher than the ROI of 3 to 4 months of mining cost "thats why BTC highest traded price during the last year was ~7.2". But today the equation has changed with the ASIC expected delivery date! GPU and FPGA miners has to return the investment in a shorter time frame. Such time frame is geting shorter every single day.

Do you have any facts that support these satements?
How is $2 related to some 12 month ROI?
How is $7 related to some 3 month ROI?
Why can suppliers not go lower (or higher) than 12 months ROI?

"The price of Bitcoin is usually related at a certain level to the expenses involved in producing 1 BTC. "

Did it cost 32 dollar to make one bitcoin in June 2011? Nope.
Did it cost 2 dollar to make one bitcoin in November 2011? Nope.
Then why do you think it is true now?
Most people mine with GPUs from day one.
Also, the most efficient GPU for that job was available when bitcoin boomed last year.
Yet the price managed to fluctuate between 32 and 2 dollar.
It would be bizar to relate this swing to the specific form of mining going on at the time as it was all mostly GPU mining with similar ROI. Mining did not change significantly, but bitcoin price swung by an order of magnitude.

As i see it, ROI is completely dependant on price and is thus just another float on the sea of speculation.
You cannot predict ROI in the bitcoin ecosystem. It is just not stable enough.
So actually thinking about mining rig ROI in this economy is nonsense. You just don't know.
Funny thing is that most miners kept mining at $2. This means most miners were somehow losing money (extending the ROI faster than they could make up by selling their mined coins. Break even point is covering electricity costs (if extended to infinity the buying price of the rig becomes insignificant) so the price could not have gotten lower than the price you pay in electricity to mine one coin. Yet it did and people were still mining.
People were mining despite the fact that their rigs had ininite+ ROI.
Mining is therefore a speculative undertaking and has no simple direct relation to current price.
You need to take into account the miners expectation of future price.

[Jointops420]

Being a miner for a year I can say that so far I have never been compelled to sell my mined coins for fiat because they cost me to mine. I have been saving most of them until the economy is more mature, buying goods with BTC now and then.
I hope it hits $25 I am bullish long term for BTC, it has already once and proven resilient in the face of so much drama so imo its a matter of time not if.

[mobodick]

Mining cost + difficulty indeed affect the supply!

No it didn't.
So why would it do that in the future?
Difficulty adjusts itself to hashrate.
Hashrate lags on price and difficulty lags on hashrate.
So difficulty is decided by the market price

So there is a relation there.
The higher the price of bitcoin, the more people are willing to mine.
But forget about ROI or other such fantasies.
ROI can only be calculated if you know the future price, which is the same as crystal ball fondling in bitcoin land.
ROI in bitcoin is a fantasy.

[mobodick]

Thats why difficulty increases with every single GH added to the network.

No it doesn't.
Difficulty increases with a higher GH/s rate, not just with every GH.
So the current -speed- of mining decides difficulty.
Less people currently mining = less difficulty.
http://bitcoin.sipa.be/ shows this clearly.
Between 1 year and 6 months ago the difficulty was falling because hashrate was falling because the price was falling.