Bitcoin hits $200

Does anyone have a link or justification in anyway for the rise in the conversion rate? I like the idea of an independent (non-government), secure currency - but I can't see this as anything other than a speculation driven investment vehicle. Seems like tulip mania to me [1].<p>Also, is there any management of Bitcoin to prevent excessive currency fluctuations? Not having this would seem to be a flaw to me - you can't have an exchange-based economic system without some expected stability in the value of the exchange.<p>[1] - <a href="http://en.wikipedia.org/wiki/Tulip_mania" rel="nofollow">http://en.wikipedia.org/wiki/Tulip_mania</a>

Is it safe for me to express my belief that Bitcoin value is being manipulated by forces who intend to crash it? I've stayed away from it simply because of that. I fear some people are in for a very rude awakening. Don't count your money just yet -- and, for god's sake, don't try to use it as the basis for any paper money loans! None of you knew about Stuxnet. The story of Bitcoin's infiltration and manipulation is years away from being revealed.

It's fascinating to watch this, largely because Bitcoin has no "natural" value. The only utility it has is as a transfer of value from one place to another, and it can do that equally well with a bitcoin being worth $1 or $200.<p>But it's really interesting to watch the value ratchet up, and easy to see how you can do this - if people will only ever sell a bitcoin for (say) 1% more than they bought it for, and people buying things with bitcoins don't care if the things they're buying with it are priced 1% higher than they might, theoretically have been, then the price of bitcoins can keep increasing indefinitely.<p>Until, that is, some people decide that they want to get rid of a lot of bitcoins, and thus are willing to accept less than that, to shift them quickly. Then the price drops. And then more people might also decide to sell, so as to convert the bitcoins they have at the value they're now worth.<p>It's classic sentiment pricing - but without any of the value "stickiness" that you get when there's some utility to be gained from the objects you're trading.<p>(I'm not trying to talk Bitcoin down here, I find the whole thing fascinating. Just thinking out loud.)

This last price fluctuation is doing more harm to bitcoin than a moratory does to a country.<p>No one can even explain formally why this is happening. Lack of liquidity? Penny stock behavior? Are there sharks driving the prices to make a spectacular exit?<p>Why isn't mining regulating the prices? Is it too costly?<p>My personal and completely uninformed opinion is that bitcoin is doomed.

I have merely a passive interest in economics, but my two cents:<p>There was an (anonymous) article a while back from someone who ran an [I believe a small] exchange, whereby he could manipulate the buy/sell prices to his advantage (driving up BTC price) - and I can see that happening very easily; I don't know what sort of algorithms Mt Gox (or any exchange) runs for it's immediate buy/sell spot price, but a simple variation of the weighted average over the past hour * 1.05 would easily provide a price that is always rising, unless a user manually gives a lower buy / sell price - and even then that would have to be beat the current price by 5% to make any impact on the spot price. Hell, you could just inflate the prices you show to users by a certain % to create that sort of meteoric rise, even if they do place lower/higher bids - those bids are somewhat based on what the value they see in that moment.<p>Is this a bubble? We just don't know. Currently there are people who are willing to part quite a lot of money for a scarce virtual currency, so by all accounts if there's a demand - the value will rise, especially if supply is limited (not just now, but there will only ever be a finite amount of BTC).<p>Even with the hiccups (0.8 vs 0.7 double spending, Mt Gox crashes) - and a price crash in it's history - surely anyone would think twice before putting down $200 per BTC, especially when it was worth only $15 three months ago.<p>What's convincing these folks to invest, I just don't know. Maybe they see something I don't, but at the moment I just see a very overvalued bubble just waiting to pop. A part of me fears that it's being overrun by folks who don't trust private financial institutions to hide their (illegitimate) wealth, as I don't think the average Cypriot has the wealth, nor there are enough Cypriots (or average / middle/working-class Europeans) altogether to create the demand which would push the price where it is now. Maybe someone can run the numbers; average salary, savings, investments, total # of folks who are tech savy enough to buy BTC, compare that with the uptake in Mt Gox (or other exchanges) signups, volume, traffic etc and put together a more substantial assessment.<p>BTC is something the world needs badly, and over the next decade I can see it becoming incredibly prominent. But the sort of rise we've seen in the past 3 months should've taken at least 3 years; and even then it's an incredible run for what's nothing more than a digital, limited commodity.

Wasn't it like $130 a few days ago? This kind of inflation is really cool for the people invested in bitcoins but this is the point where I would panic sell, but perhaps I'm a coward.<p>EDIT: Link's down, it was $203 at 12.06 GMT.

It still has just $2 bln "market cap". If it was a payment processing company, you would call it a slow democratic IPO, not a bubble about to burst.

The problem with bitcoin is 1 or 2 events that give the public a 'scare' have the potential to nearly floor the usd value.<p>All it takes is one headline on CNN like "Joe Blow selling Anthrax and Cyanide on Silkroad/Craigslist for Bitcoins" for the general public go to fucking apeshit and cause some real 3 letter organizations to shutter most bitcoin exchanges with secret subpoenas and such.<p>Realistically, there is so much dependency on mtgox, once it went down I believe the price of bitcoins would likely be 10x less than it is currently.

I'm not a substantial bitcoin investor, but I follow bitcointalk.org fairly actively, and there has been a fairly noticeable increase in posts about ASIC (Application Specific Integrated Circuit) solutions being a profitible means to mine Bitcoins. I don't know whether this is a driving factor, but it certainly relates to the expanding market in general.<p>The wide perception of Butterfly Lab's ASIC solution as being a scam has resulted in wide interest in alternatives, which are legitimized by seemingly functional and deliverable ASIC solutions by companies like Avalon. At over 6,000 Mh/S per module, they exceed the best GPU/FPGA solutions for mining almost by a almost a hundred fold (after factoring power consumption), which has produced a tangible market of bitcoin hardware.<p>Regardless of whether specialized Bitcoin ASIC hardware is cost effective, the production serves to legitimize the currency/producing market as a whole (as well as reinforcing the hype/gold rush mentality for miners and speculators).<p>I'm still not sure how/whether the currency will eventually settle, but it is very interesting to follow.

What goes up...<p>The past couple of weeks has shown how easily the bitcoin market can be manipulated. People used to do this with shares. Buy up all the shares to push the price up. Then get out with a profit crashing the value of the share.<p>I don't think this is any different. I wouldn't be surprised if a handful of parties were responsible for the explosion in bitcoin value.<p>You could point to the Cyprus banking crisis perhaps as a reason for an increase in value but realistically Bitcoin is just one major hack away from being worthless again... Its like keeping your gold on a wooden shelf above a lava pit.. why anyone would put long term savings into Bitcoin right now is beyond me.

BitCoin reminds me so much of the early days of the internet; the ingenius technology, the promise, the hype, the misconceptions, the rampant ill-informed speculation. And of course the few neat things it could actually do, with a promise of so much more to come.<p>And perhaps, the dot-com style bust at the end that puts things back in perspective and paves the way for real growth and adoption...

One thing I don't get about bitcoin is how the transition from paying for mining to charging for transactions is going to be handled. This seems like a big upcoming change now all this money is sloshing about.<p>I take it the plan for transaction fees is carefully worked out to make it still be attractive to miners and merchants vs charges for visa etc or have I got the wrong end of the stick?

So how much was that first pizza worth now?

I have something like 0.01BTC (tried mining it once, it wasn't worth it), by this rate it will be worth $200 someday too.

I'd love to short Bitcoin.<p>Are their any platforms/startups that allow short selling this currency?

Can we expect an exceptional fall soon?

I can't believe this is catching up

The funny thing is that it didn't hit $203, or $201.12, but $200.<p>Whoever is driving this big buys to drive up the price is doing it at very predictable, very specific price points, across multiple currencies.<p>On mtgox GBP, for instance, it plateaus and peaks at very predictable values - £125, £130.<p>Frankly, I think that what's going on is there are a few traders (actual traders, not BTC speculators) who are driving the entire market. Hell, you can push the GBP price around just by buying or selling a few dozen BTC, the volumes are so low.<p>Guess what I'm getting at is that there's a hidden force behind this, and they're not dumb - but most of the speculators apparently are.

Should I cash in my pizza money <a href="http://motherboard.vice.com/blog/this-pizza-is-worth-750000" rel="nofollow">http://motherboard.vice.com/blog/this-pizza-is-worth-750000</a> or wait for BTC $400 ;) ?