The Rise of Bitcoin Cost

[Saitekman12345]

Bitcoin prices rise...


Lately the price of BTC has sore above the roof!

(4-5$USD to 10USD)

Why is that and what is the factor that will stop the rise?

Are more people investing in Bitcoins or somewhat "hoarding" them?

Not sure what the problem is, I would love to know why.

[Nesetalis]

Right now, i'm selling a handful, hording the rest... oh and buying some things.

[FreeMoney]

Heh, I'm not sure what the problem is either.

[bittenbob]

Heh, I'm not sure what the problem is either.

Problem? I'm not quite sure I would call this a problem.

[mobile4ever]

Some people claim it is because of Paul Graham of YCombinator starting a Bitcoin project.

[FreeMoney]

Heh, I'm not sure what the problem is either.

Problem? I'm not quite sure I would call this a problem.

Neither would I.

Bitcoin prices rise...

Not sure what the problem is, I would love to know why.

[Graet]

I too am curious to know why a rise in price is perceived as a problem.

[JoelKatz]

I too am curious to know why a rise in price is perceived as a problem.

Use as a medium of exchange is critical to Bitcoin's long-term success. Instability in value makes a currency harder to use as a medium of exchange. Imagine, for example, if you placed a large purchase on a Bitcoin credit card and the value of Bitcoins doubled. Or imagine if your rent was in Bitcoins and then the value of Bitcoins doubled.

[Vitalik Buterin]

Rises in price aren't a bad thing. They have some harmful effects in the case of merchants who set fixed BTC prices, but their good massively outweighs the bad - they make using Bitcoin as a currency exchange intermediary essentially free or even negative cost, they encourage general interest in Bitcoin, and they make Bitcoin holders, the largest of whom are also Bitcoin businessmen, richer. But we're not worried about the rise. We're worried about the fall after the rise. At this point I doubt Bitcoin will fall to less than $7, but if Bitcoin goes up to $40 and then back down to $7 that would seriously disrupt the Bitcoin economy in many ways - it was a big problem the first time it happened in late 2011.

[gilgil]

High BTC price is mainly a good thing, as it stabilizes the price - a 1$ movement in price is huge when price is 5$, and a minor thing when price is 100$

[Vitalik Buterin]

High BTC price is mainly a good thing, as it stabilizes the price - a 1$ movement in price is huge when price is 5$, and a minor thing when price is 100$

That's not really a good argument -  there's no reason why the absolute volatility of the price should be constant, rather than proportional to the price itself. What is a good argument is that higher price implies more people which implies a more diffuse community and therefore more stability due to the random walk effect.

[ice_chill]

It started rising after Butterfly Labs started taking payment in BTC for their new mining equipment.

[Portnoy]

"Correlation does not imply causation"

[bg002h]

It started rising after Butterfly Labs started taking payment in BTC for their new mining equipment.

Are they hoarding?

[Lethos]

The cause?

More people with traditional market trading experience are getting into bitcoin, not as miners, but investors.
Making money the same way they use to (or maybe still do) trading bitcoin as a currency at the right times for the right price for a profit.

Also speculation of difficulty changes due to new hardware coming to the market in the coming months, plus the block halving soon is a reason for influencing the value of each bitcoin.

[istar]

Its a combination of several factors.

Bitcoin surviving the previous crash.

Paul Graham of YCombinator
Bitinstant making bitcoin available at Walmart and Seven Eleven.
Nordic Bitcoin making Bitcoins available to 300 million people
Manipulation
Expectations
More investors
Bigger investments
Bitcoin slowly starting to spread across the globe.

The Great Euro Crash - 2012
http://www.youtube.com/watch?v=dyNekAJ6rA8&feature=player_embedded#!

But really, if Bitcoin can be expected to be at $50-$150 in 4-5 years or $1000 in 10-15 years.
It has to start going up sometime.

[markm]

It is still ridiculously underpriced, only now starting to recover from the big loss of confidence that brought it down from the $30+ it was at last year...

-MarkM-

[augustocroppo]

Bitcoin prices rise...


Lately the price of BTC has sore above the roof!

(4-5$USD to 10USD)

Why is that and what is the factor that will stop the rise?

Unexpected dumps:

Are more people investing in Bitcoins or somewhat "hoarding" them?

Not sure what the problem is, I would love to know why.

Yes, there were more people securing investments and buying Bitcoins in the last two months:

The Accumulation Distribution Line can be used to gauge the general flow of volume. An uptrend indicates that buying pressure is prevailing on a regular basis, while a downtrend indicates that selling pressure is prevailing.

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:accumulation_distrib

[mobile4ever]

"Correlation does not imply causation"

But its interesting to factor in...

[niko]

I too am curious to know why a rise in price is perceived as a problem.

Use as a medium of exchange is critical to Bitcoin's long-term success. Instability in value makes a currency harder to use as a medium of exchange. Imagine, for example, if you placed a large purchase on a Bitcoin credit card and the value of Bitcoins doubled. Or imagine if your rent was in Bitcoins and then the value of Bitcoins doubled.

Isn't it the case that with low (even if stable) prices, any large transaction in an exchange will move the market, thus causing volatility? The recurring joke here is that current btc economy cannot even sustain a fancy yacht or a house being traded without volatility.

The only way to a more stable and functional market is increase in "market cap" (a misnomer) - and since supply is set in stone, this means increase in exchange rates (influx of fiat capital).