Bitcoin hits year-high of $20

Bitcoin hits year-high of $20(bitcoincharts.com)

132 points by redegg 13 years ago | 68 comments

hnolable 13 years ago |

Waiting for tokenadult to repost his Bitcoin comment: https://www.google.com/search?q=site%3Anews.ycombinator.com+...

In all seriousness though, there is one interesting thing that is different now from last time. Last time being the previous frenzied Bitcoin price hype bubble that peaked at 31$. No one fears that Bitcoin will crash to 0/pennies anymore once the price stops climbing, at least not due to standard market forces. It's pretty well established now that there is some baseline demand that will form a price bottom (assuming no large network attack occurs). What effect that will have on this bubble (if one forms) is hard to say but it should be interesting and not a repeat of last time.

SlipperySlope 13 years ago | |

Sure many say that now. But what if public greed takes over again and prices rapidly approach say $60, then the price rise would be hyperbolic and crash back to somewhere below here.

... just along for the ride with the bitcoins I mined and am hoarding.

btbuildem 13 years ago | | |

Well, you sell high, and buy back low, presumably.

pygy_ 13 years ago | |

When you look at it in log scale, you also realise that the current growth rate is pretty tame compared to what occurred in the spring of 2011.

http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zvzl

loeg 13 years ago | |

I sold at $17 and don't regret it (bought at $14-15 earlier that week). But my typical use is of bitcoin is a as barter currency (where the other party only cares about dollar value), I'm no speculator.

uncoder0 13 years ago | | |

Similar story here. Bought and mined about ~100BTC when it was around 5$/BTC and sold @ 10-15. I converted some to physical coins from https://www.casascius.com/ and keep those on my desk. I guess I should put them somewhere less obvious. Haha

cs702 13 years ago |

All else being equal, the more people who use Bitcoin (whether as a store of value or medium of exchange), the greater the demand for it -- and therefore the higher its price, because the supply is fixed.

This means that in the long run, Bitcoin's price will be positively correlated with its adoption.[1]

[1] My full thoughts on the matter: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...

porter 13 years ago | |

Of course all things are never equal. The problem with investing in bitcoins for the long-run is that eventually governments will make it illegal. Sure, they can't easily stop you from owning bitcoins, but they can ban businesses from accepting the coins, which would of course collapse the currency overnight. Governments don't like competition.

gamblor956 13 years ago | | |

Governments don't care if you use bitcoin or not. They can, and do, tax you based on whatever income you earn, in whatever currency it is denominated. Indeed, the US, Europe, and most of Asia already have tax laws for how to report income denominated in currencies other than the government's own currency.

Not reporting income denominated in bitcoin will simply result in prison time and financial penalties measured and payable in the government's currency.

efnx 13 years ago | | |

I'm still wondering why governments see it in their best interest (if it is in their best interest) to make it illegal. I know they can't track their citizen's activity on the network but when an individual cashes out, they would pay taxes on their earnings.

To me it seems to be a choice of what does big brother value more - money or information?

Banning a business from accepting bitcoin would be as hard as telling a business they couldn't give stuff away for free. I think they could shut down the exchange portals, but they couldn't keep people from trading goods for BTC.

rms 13 years ago | | |

At this point I believe that intelligence interests in the USA will prefer bitcoin to stick around, because it is not nearly as anonymous as most people think it is.

mrb 13 years ago |

Plus Avalon just started shipping the first mining chip ( http://blog.zorinaq.com/?e=70 ). And they announced they will only accept bitcoins as payment for the 2nd batch of 500 units @ $1500 ea, which starts selling tomorrow... That potentially means people buying $750k worth of bitcoins for a batch that will sell out really quickly. This will surely push the exchange rate even higher than $20.

Edit: there is no resistance upward right now on MtGox. $300k of buys would push to $24. $500k to $30. http://bitcoincharts.com/markets/mtgoxUSD_depth.html

api 13 years ago |

Bitcoin has speculative bubbles, fraud, robberies, money laundering, gambling, and Ponzi schemes. I think that takes care of all the qualifications for a real currency. Am I missing anything? :)

spoiledtechie 13 years ago | |

References to each of your claims.

loeg 13 years ago | | |

Not OP, but I'll fill in the blanks for you:

(1) Bubble: http://www.economist.com/blogs/babbage/2011/10/virtual-curre...

(2) Fraud and Robberies: https://en.wikipedia.org/wiki/Bitcoin#Theft_and_fraud

(3) Money laundering: https://en.wikipedia.org/wiki/Silk_Road_(anonymous_marketpla... , https://en.wikipedia.org/wiki/Bitcoin#Taxation

(4) Gambling: https://en.wikipedia.org/wiki/Bitcoin#Gambling

(5) Ponzi Scheme: See "Bitcoin Savings and Trust" in https://en.wikipedia.org/wiki/Bitcoin#Theft_and_fraud

Almost all of that was found in the Wikipedia article for Bitcoin (with citations). Please don't be too lazy to do your own research…

mrb 13 years ago | | |

I don't think api was criticizing Bitcoin. All these evil activities are very unfortunate, but on the other hand they are indicators that a currency is valued and liquid, which is a good thing in itself.

nathanm412 13 years ago | |

Now you can add inflation to the list.

rm999 13 years ago | | |

It's deflation. With inflation the amount you can buy with a set amount of your currency goes down (i.e. your currency is dropping in value). Right now the bitcoin is rising in value.

raverbashing 13 years ago |

It would be interesting to compare BtC not only to the USD, but also to a bag of currencies, to see if it relates to a USD devaluation 'compared to the rest' (usually JPY, EUR, GBP)

tcgv 13 years ago | |

I guess that, according to the efficient market hypothesis[1], you can expect the price of bitcoins in other currencies to be the same as the price in dollars adjusted by that currency exchange rate. Otherwise easy profit would be possible through arbitrage, and after some people took advantage of the price difference to make some money the prices would stabilize at a point where profitable arbitrage would not be possible anymore.

[1] http://en.wikipedia.org/wiki/Efficient-market_hypothesis

raverbashing 13 years ago | | |

" according to the efficient market hypothesis[1], you can expect the price of bitcoins in other currencies to be the same as the price in dollars adjusted by that currency exchange rate"

You're right, apart from market inefficiencies that's right.

But I'm proposing something else, to analyse the variation (which, of course, for BtcGBP is effectively BtcUSD * USDGBP) against other currencies to see if it's (for example, in this case the price of BTCUSD rising) if it's a dollar devaluation or if it's BTC that's increasing in value

DennisP 13 years ago | | |

If no arbitrage profit is available, nobody will do it and the profit opportunity will return.

DanBC 13 years ago | |

It'd be good to see it on the Big Mac index

(http://www.economist.com/blogs/graphicdetail/2012/07/daily-c...)

jerguismi 13 years ago | |

LOL, how interesting? It has been going up related to everything else, even gold & silver. I doubt that there exists a better-performing non-hedged asset.

erode 13 years ago |

Your title isn't clear, and it's not even February yet, so I assume you meant "over the last year".

jpadkins 13 years ago |

Anyone else think this looks like the Gartner Hype cycle? http://en.wikipedia.org/wiki/Hype_cycle

Maybe I need to get back in to bitcoin mining...

MacsHeadroom 13 years ago | |

Yes.

philfreo 13 years ago |

Plug for my "fastest way to lookup bitcoin price" website:

http://bitcoinprices.org/

yebyen 13 years ago | |

As long as we're plugging that...

http://preev.com

snake_plissken 13 years ago |

Liquidity is the major issue for the foreseeable future.

MacsHeadroom 13 years ago | |

Bitcoin is highly liquid and only becomes more so each day.