Silk Road forums

Discussion => Silk Road discussion => Topic started by: android465764E on March 06, 2013, 11:40 am

Title: Another ฿itcoin rant. Too high! Or is it? (Ō_o)
Post by: android465764E on March 06, 2013, 11:40 am
In the time that I've been a member at SR I've seen the btc rates steadily climb non-stop. Good vendors seem to be adjusting their prices accordingly, but nevertheless, I'd like to know what members think of the rates, and what their own experiences are?
What's the lowest you've seen the rates drop to? What's the highest? Does it affect your purchasing habits? etc..  Just proposing an open discussion about how/why the rates seem so volatile.

Personally, when I joined eight weeks ago, ฿1.00 was valued at £9.00
Today, it's flirting around the £30.00 mark.

For the rates to climb that much in 8 weeks, seems unusual (for me), is this rate of increase normal? Or is something afoot? *dramatic dun dun daaaaaaa music*
Title: Re: Another ฿itcoin rant. Too high! Or is it? (Ō_o)
Post by: Wazup7 on March 06, 2013, 12:44 pm
This pattern is reminiscent of the bubble that burst in June or July 2011.  Prices *shot* up to ~$30USD, and then tanked down to like $2 before leveling off at $12.  The only differences between then and now are that a.) this time won't be the first time, and b.) the rate of increase now, while very dramatic, isn't nearly what it was in 2011.  The thing is, rate of BTC entering the market was halved in November (each solved block only yields 25BTC instead of 50, but the rate of solved blocks is designed to stay constant).  So fewer BTC entering the market, and people are not currently willing to sell probably because the price is still rising.  Couple that with the fact that more people are being turned onto Bitcoins, we have a growing demand and a smaller supply, hence the value keeps rising.

Nevertheless, I'm pretty sure that we will hit a high, and then it will drop to some level where it will stabilize.  Don't know when, or what the high will be, or what price it will level out at.  No one knows, since there isn't a historical precedent for a market like this.  It might keep rising past $100/BTC, before it levels out at $80, or it might stop at $50 and level out at $20.  It might hit it's high in March, or it might keep rising through all of 2013.  Any prediction from anybody about specific prices and timetables is pure speculation though. 

The poll options don't really cover that scenario I described, which I'm mostly sure is what will play out. 
Title: Re: Another ฿itcoin rant. Too high! Or is it? (Ō_o)
Post by: chil on March 06, 2013, 12:51 pm
This pattern is reminiscent of the bubble that burst in June or July 2011.  Prices *shot* up to ~$30USD, and then tanked down to like $2 before leveling off at $12.  The only differences between then and now are that a.) this time won't be the first time, and b.) the rate of increase now, while very dramatic, isn't nearly what it was in 2011. 


When the BTC dropped from 30 to 2 dollars, it was because MtGox had been hacked.
Title: Re: Another ฿itcoin rant. Too high! Or is it? (Ō_o)
Post by: Bradypizza on March 06, 2013, 08:21 pm
If silkroad went offline, I bet the drop would be violent.
Title: Re: Another ฿itcoin rant. Too high! Or is it? (Ō_o)
Post by: TheGoodSon on March 06, 2013, 09:02 pm
"Good vendors seem to be adjusting their prices accordingly, but nevertheless, "

If I read this shit one more time, I am going to kill somebody.

Vendors do not adjust their prices, probably 99% of the prices are pegged to the USD, the prices adjust automagically.
Title: Re: Another ฿itcoin rant. Too high! Or is it? (Ō_o)
Post by: grahamgreene on March 06, 2013, 09:19 pm
If silkroad went offline, I bet the drop would be violent.

Silk Road has gone offline before for a period of time with less than a 1.5% change in Bitcoin's overall value - a change which could also have been attributed to a number of other factors occurring in the Bitcoin world around that time.

Silk Road's annual sales are estimated to be around $22,000,000 USD.
The 30-day Volume (Currency) on Mt.Gox alone (as the largest BTC exchange) is $49,940,882.67 USD.
Multiplying that by 12 to get a very crude annual figure, the annual Volume on Mt.Gox would be $599,290,592.04.

This means that Silk Road represents 3.67% of overall Bitcoin trade on Mt.Gox alone, as the largest exchange.
A more likely figure, counting all other exchanges, would be more in the range of 1.5% to 1.7%.

Going by those figures, if Silk Road went offline for good, there would be little to no impact on the overall Bitcoin price or value.

There will be a series of minor corrections in the near future, but Bitcoin's value won't "crash" as it has done in response to various scenarios in the past. There is simply too much money circulating in the Bitcoin economy for that to happen.

Within 5 years, if Bitcoin continues its current adoption trends, I would be very surprised if 1 Bitcoin could not buy you an ounce of gold (currently trading at $1582.95 USD).

- grahamgreene