Long-term discussion on Bitcoin's price trend

[yeponlyone]

The next halving would certainly be interesting, especially if you believe the downtrend during 2014 was caused by new supply without new adopters. It's about one year and six months away from now. So 2015 might wind up being a bit boring compared to 2016 (but BTC might still go up if slowly during 2015 I hope, but i'm not confident to say we're at the bottom either), but who knows.

Last halving did make BTC go from double digits to triple digits, so the psychological effect is there I think. Then again, some altcoins have proved that halvings are not necessarily directly affecting value, but other hand the bitcoin halving would be widely celebrated in the BTC community.

The only thing that might change might be the price that is pre-halving. Its almost 1.5 years from now. The increase would a lot depend on what the price is right before it.

It will be a massive pump and dump potentially.

[nakaone]

this will be a fun thread to read in the future.

I think the whole price discovery is solely dependent on jurisdictional integration.

It does not really mater if you are a (regulated) hedge fund, a bank or an enterprise wanting to integrate bitcoin, you are depending on a regulatory framework. once this is finished and does not end in quasi-ban, the cards are shuffled again.

I assume regulation will lead to a lot of crying within the community, it will lead to giving up at least some principles; but it will also lead to adoption (which in my opinion, we have not seen besides from maybe to 2-3 groups within society)

if this happens within a timeframe of the next 6-12 months, I assume we see within 24 months prices in the four digit area

[painlord2k]

The exchange (with the USD) rate depend on how much net value (measured in USD) enter the bitcoin network thru buying coins against how much coins are created every day.

It is an instantaneous measure and vary constantly as coins are sold and bought.

If the mean is USD 1M/day, the price must stabilize around USD 277.7 mean. After the halving, half of the coin would be mined and the price should stabilize around the double.

But it is not so easy to foresee the price. We must take in account the inflation rate. Currently, the inflation rate of Bitcoin is 11.85% (in the last year) against 8.38% of MB and 10.14% M1.
The differential was larger in the months before. So, for the last year, Bitcoin inflated FASTER than the USD (both MB and M1), so the falling exchange rate is easily explanable by this.
In fact, you can see, from the charts, the exchange rate didn't collapsed suddendly, but was slowly eroded as new coins were mined and sold into the market.
So, if the new supply is cut in half, the price MUST react in some way and the only direction is up. How much and how fast is difficult to say.

The growing number of transactions and adoption from big business and merchants show there is use and utility from Bitcoin as a payment system.
But lower is the exchange rate, larger is the number of coins people need to buy to transfer the same value. So lower the exchange rate, higher the demand for coins must be to move the same value.

At the current exchange rate of 230, some billionaire deciding to dip his toe in Bitcoin with $ 50M (like Draper did) could just buy all mined coins for near two months.
And if you have someone draining out so many coins, the other must be priced just by ask and bid of the existing coins (weak hands give them to strong hands).

The same effect of a strong hand buying a lot of coins would be to have business starting to use the coins they get from customers to immediately pay their suppliers instead of converting them immediately using a payment processor like BitPay.
E.G. Buyer--> Overstock.com --> Dell.com--> Microsoft--> Employees/Buyers (repeat)
If these coin do not need to get exchanged for fiat, they can not drive the price down.

[HarmonLi]

The overall longterm price of Bitcoin is way above current levels in my opinion. I think we're talking about $10'000-$100'000 per BTC over the next 5 years or so. Sure, there'll be bubbles popping, major drawbacks and corrections, but the overall direction will be quite bullish, I guess. I gotta admit, I'm nervous about the current prices, though.

[thezerg]

The driving force behind Bitcoin is illegal activity. Silk Road drugs, China exchange control evasion, and, in the background, gambling. Without some new large-scale illegal or semi-illegal activity adopting Bitcoin, the overall trend is down.

Not really.  The driving force is holders.  Holding a single coin consumes as much supply as a huge amount of economic activity if you assume a reasonable but still very conservative velocity.  For example if a transaction ties coins up for 3 days on average then holding has 100x the effect as activity.

What's the driving force behind holders? 

First, liquidity.  Its important to be able to easily spend BTC.  This is why exchanges are important and why other economic activity (legal or illegal) is important.  Liquidity, portability, and easy-to-hold-yourself are the key arguments to prefer BTC over gold for holding (its a PITA to redeem your gold coins for USD or food).  So removing liquidity removes a big advantage, although not the only advantage.  So Gox was a big blow and conversely the coinbase exchange is a shot of liquidity confidence for US markets... but the real confidence comes from seeing consistent economic activity occurring.  So if you want BTC to succeed, spend your coins (and rebuy them)!  While its obviously less convenient (than other forms of payment) if you buy exactly what you need just before you spend, I find it faster and more convenient if I load my phone once a month (say) and then spend when needed.  I can point my phone at a QR and press pay a lot faster than getting out my CC and typing in all the numbers...

Second, diversification.  Holders want to move some assets away from their home country currency.  And by extension move some assets away from all currencies using the same potentially flawed management system (central banks).  But stabilization of the fiat systems means that pressure to diversify out of fiat is pretty low right now (I am guessing I haven't done research).  And for those doing it, Bitcoin is not comparing as favorably against stocks, real estate, gold, etc because of the year long BTC price decline.  However, that vicious circle can reverse quickly with 3-5 months of price stabilization or slight rise (as we saw in 2012).  And recent behavior in Greece might bring the flaws of the global fiat currency systems to the forefront once again, depending on the repercussions of the 240 bln default has.  Remember, QE etc (essentially buying loans with newly printed $) has no long term effect on inflation (in fact, causes deflation), because eventually the money gets paid back.  Once paid back, the QE printed money is retired so net is 0 (actually net is negative given payment of interest on the loan).  Works great UNTIL the loan defaults.  At that point, the QE money will never be paid back -- so there's now 240bln additional euros permanently in the supply.  Oops.

[azguard]

The next halving would certainly be interesting, especially if you believe the downtrend during 2014 was caused by new supply without new adopters. It's about one year and six months away from now. So 2015 might wind up being a bit boring compared to 2016 (but BTC might still go up if slowly during 2015 I hope, but i'm not confident to say we're at the bottom either), but who knows.

Last halving did make BTC go from double digits to triple digits, so the psychological effect is there I think. Then again, some altcoins have proved that halvings are not necessarily directly affecting value, but other hand the bitcoin halving would be widely celebrated in the BTC community.

you're right for this thisnk that price in 2015 will be plus minus ~30-50$ up or down, but if same thing as last halving occur then we can expect huge jump in price, for alt i dont thing that all will follow only few ones this time

[knight]

The market is oversaturated with 3600 daily coins. Unless many people get in, there's no way but down. I'd expect 150 soon.

[knight]

We should expect sub 200s soon. Every attempt to go beyond 260 failed miserably and price could go as low as 120 for some short periods of time.

[uki]

The driving force behind Bitcoin is illegal activity. Silk Road drugs, China exchange control evasion, and, in the background, gambling. Without some new large-scale illegal or semi-illegal activity adopting Bitcoin, the overall trend is down.

It comes down to the point, how to achieve the mass adoption. It is not an easy task to have our grandmas paying with BTC for the groceries, but that is what we want in the end. And it is also quite understandable in the early adoption phase (despite initial success, BTC is still in the early adoption phase) that some illegal/semi-legal activities you mentioned, kick in trying to go for a quick buck. Now, what is needed is a monstrous effort to substitute the picture of the BTC as the virtual currency for illegal activities and laundering money with a picture of decentralised and reliable payment network. that is why, we are now in a horizontal trend (more horizontal than down trend to me), expecting some sentiment change and thus more bitcoin-positive developments.
   

[ThatDGuy]

We should expect sub 200s soon. Every attempt to go beyond 260 failed miserably and price could go as low as 120 for some short periods of time.

I wouldn't be surprised by sub 200's, but I also think given the market's reaction to the big dumps over the past few weeks that I wouldn't expect them for sure, either.

[neurotypical]

I invite anyone to join a long-term topic on how you think bitcoin is going to behave. You can speculate, smart guess, comment on any timeframe you want, from hours to years (short, medium and longterm). You can also post comments on things (news, developments etc) that you think affect price, either up or down.

So far, we are seeing the first cryptocurrency in it's most prolonged bear market ever. Price declined steadily for last 14 months and no sign of recovery yet. Even if we had some pump-and-dumps along the way, we're still at 220 USD.

My sincere thought is that we'll see mind-blowing lows (I won't give any target because that's pretty much impossible) and afterward the market will recover fast, so fast it will be prime time news.

I agree with your view. We are headed towards a year of downtrend while whales silently stack up and dumbasses sell their cheap coins, only to find out that after some months Bitcoin proves historical resilence power and the price goes to 4 figures causing massive butthurt into naysayers, as they join the boat missers crew, again.

[ajareselde]

I invite anyone to join a long-term topic on how you think bitcoin is going to behave. You can speculate, smart guess, comment on any timeframe you want, from hours to years (short, medium and longterm). You can also post comments on things (news, developments etc) that you think affect price, either up or down.

So far, we are seeing the first cryptocurrency in it's most prolonged bear market ever. Price declined steadily for last 14 months and no sign of recovery yet. Even if we had some pump-and-dumps along the way, we're still at 220 USD.

My sincere thought is that we'll see mind-blowing lows (I won't give any target because that's pretty much impossible) and afterward the market will recover fast, so fast it will be prime time news.

I agree with your view. We are headed towards a year of downtrend while whales silently stack up and dumbasses sell their cheap coins, only to find out that after some months Bitcoin proves historical resilence power and the price goes to 4 figures causing massive butthurt into naysayers, as they join the boat missers crew, again.

So you are saying that by the end of the year we will be seing 4 figures in bitcoin price, be honest now.. ure bagholding,right?
Bitcoin will still be there , and hashes will be made, yes, but the price has zero chance of four figure number as the trend is slowly fading. Money is being pushed in and out, only to get more fiat, not bitcoins,
and that is killing the price. I hope you are right and i am wrong, but i highly doubt it.

cheers