If you’ve taken a peak at the bitcoin price charts lately, you might have noticed that the price of bitcoin is down. Some would say alarmingly so, but for those of us that have been in the game since the beginning, it’s nothing we’re not accustomed to by now.
A quick peak at the charts (drawing data from the Bitstamp exchange) quotes us $436 at the last trade (as of this writing). Over the past seven days, we’ve seen the price slowly sink down to this level from the $480 range — down over 7 percent.
Which of course leads many to ask: what in the world is going on?
If there were an easy answer, that would be great. But the fact of the matter is that the price of bitcoin does wild things, and I certainly don’t know or pretend to know why the price is trending in a certain way.
It’s interesting, though. Generally when the price tends to sink, you’ll find threads pop up on social sharing website Reddit.com designed to lighten the spirits of those who may be discouraged by bitcoin’s recent performance (see this link as an example).
Despite the chatter, it certainly does seem as if the community remains optimistic. Why shouldn’t they? After all, many of us have been here before (as noted previously).
The question now is: where do you see the price going from here? Do you think we’re in for some additional losses, or do you think we’ll be seeing a recovery in the near future.
Many of you are much more knowledgeable than I on bitcoin’s price movements, so don’t be shy to chime in.
Eric, Thanks for the great writing. Bitcoin will continue its descent to sub 400 and then rebound. There are many great folks in the Bitcoin community that are supporting Bitcoin from an “interest” perspective or have a small amount invested. Bitcoin is now being used as a financial tool by a few groups that have access to large funds. This is a game changer for the little guy as volatility will keep Merchant adoption low. Low Merchant Adoption means long term low price. Summary: Bitcoin as a speculative tool YES – Bitcoin as an everyday currency NO
BIGbtc.ca Bitcoin Integration Group – Toronto, Canada
Yes, I am invested in Bitcoin, No I am not worried about the price. There is too much investment in Bitcoin technology to not think Bitcoin will eventually succeed. I expect volatility while people are still digesting the whole digital currency / decentralized currency methodology. In the end, Bitcoin investors will be rewarded…. remember no risk / no reward …. high risk / high volatility. Just advice from a personal investor… don’t micro-manage your Bitcoin investment… and always stay diversified with all of your investments.
I have 10k in mining equipment that was running profitably for 6 months until yesterday. With current mining Tech and avg power rates, BTC needs to remain above $450 for US mining to occur.
I’ve seen some people say it’s because of the Alibaba IPO that chinese investor sell their BTC to buy shares (BTC/CNY represented 78% of the trades lately according to some sources…).
My (french) blog : http://achat-bitcoins.com
Merchants who are “in the know” don’t let the perceived volatility prevent them from adopting Bitcoin. Merchants tend to convert their receivables to local currency ASAP – unless they act as speculators and hold BTC as an investment.
Because of this, merchants don’t have much volatility risk, as consumers bear the brunt of it.
Example:
When 1BTC = $500… Merchant collects 0.01BTC for the $5 item being sold.
When 1BTC = $1… Merchant collects 5BTC for the $5 item being sold.
The merchant exchanges BTC to local currency within a few hours. In both cases – the merchant collects roughly $5 for their merchandise. It’s the consumer who must pony up more/less BTC because of wild volatility. They may decide to hold off making a purchase – waiting for a better exchange rate.
This isn’t anything new. The same thing happened during the Gold Rush in San Francisco. Merchants accepted different amounts of gold based on the most recent value and then would convert it into dollars as quickly as possible. Also anyone who accepts foreign currency knows this. We accept foreign money at the current exchange rates – then we cash it out as fast as we can into our local currency.