Why Is Bitcoins Price So High?
Zelda expansion, Death Stranding and other titles hyped at The GameAwards Bitcoins price has risen stratospherically, a fact that leaves many minor players in the market with massive gains and many bigger players millionaires. But is this a bubble? Are the gains real? And are the bitcoin whales in for a sad Christmas? First we must understand what drives bitcoin price and, in particular, this boom. The common understanding for current growth leads us back to institutional investors preparing for the forthcoming BTC futures exchanges. The primary theory about the astonishing rally being put forward by investors on social media is that bitcoin will soon benefit from big institutional money injections via the introduction of the first BTC futures products. CBOE Global Markets and CME Group are launching new futures contracts on December 10 and December 17, allowing investors to go long or short on bitcoin. This ability makes bitcoin far more palatable to big investors who are currently flooding the market to make profits if and when the bitcoin price falls. This move also legitimizes bitcoin in Wall Streets eyes, an important point considering cryptocurrencies are still suspect. Further growth comes from the bitcoin as a store of value crowd. This group of enthusiasts bought and held bitcoin and will not sell it at any current price. More and more bitcoin fans are entering into this group and they are driving up demand increases. In a world where people expect bitcoin to be worth $1 million soon this sort of activity whether rational or irrational is quite popular. We see a common thread between these points: hype and news. All cryptocurrency movements are based on domain specific media and conversations between traders. Bitcoin traders, it can be said, are now akin to th Continue reading >>
Bitcoin Hits $2,000: 3 Reasons For The Surge In Value
The digital currency bitcoin is on another remarkable run, soaring nearly 65% in the last month, and smashing the symbolic $2,000 mark for the first time ever this week. Bitcoin has gone on tears in the past, but never quite like this. So whats behind the latest bull run? Its hard to say for sure, since bitcoin is so unpredictable, but here are three factors that are contributing to bitcoins boom: 1. The Worldwide Demand for Digital Currency The $2,000 bitcoin milestone comes amid a larger trend of investors clamoring for crypto-currency of all sorts. While digital money was once seen as the province of cranks and computers geeks, its now so mainstream that investors see it as a new asset class and are creating hundred million dollar hedge funds to acquire it. Meanwhile, others see digital currencies as an asset like gold, which can hold its value amid times of government instability. Recent political upheaval in Brazil and the United States, which led to drops in the dollar and the real, may have contributed to the recent uptick in bitcoin buying. Finally, bitcoin may be benefiting indirectly from a recent explosion in the value of other digital currencies like Lumens, Ethereum and Litecoin . While its possible to buy these currencies with dollars or other traditional currencies, its often simpler to use bitcoins (which is the easiest digital currency to acquire) to buy them. In other words, more people may be buying bitcoin as a vehicle to invest in more exotic currencies. At the start of April, regulators in Japan introduced new rules that treated bitcoin less like an outlaw currency and more as a part of the banking system. That change led to a burst of trading activity in the country investors rushed to swap yen for bitcoin. The effect on price has been predicable Continue reading >>
How Bitcoins Became Worth $10,000
Sign up or login to join the discussions! A few years ago, people thought Bitcoin was a joke. Now it’s worth billions. On Tuesday evening, the value of one bitcoin shot above $10,000. It has been a remarkable run for a currency that was only worth about $12 five years ago. The run has been particularly remarkable because it's still not clear what Bitcoin is useful for. During its early years, the cryptocurrency garnered a lot of optimistic talk about how it would disrupt conventional payment networks like MasterCard or Western Union. But almost nine years after Bitcoin was created, there's little sign of it becoming a mainstream technology. Few people own any bitcoins at all. Even fewer use it as a daily payment technology. Yet that hasn't prevented the cryptocurrency's value from zooming upward. One factor driving Bitcoin's growth has been the emergence of a broader cryptocurrency ecosystem. Bitcoin serves as the reserve currency for the cryptocurrency economy in much the same way that the dollar serves as the main anchor currency for international trade. In this piece, we'll explain the key innovation that set Bitcoin apart from all previous electronic payment schemes. We'll look at how Bitcoin won over regulators and venture capitalists to become a significant part of the global financial system. And we'll examine the cryptocurrency boom of the last year that has helped drive Bitcoin's value into the stratosphere. While we can tell the story of Bitcoin's rise and point to some of the factors that have pushed its value upward, we can't really explain why the currency's value goes up or down during a particular day, week, or month. In particular, bitcoins have more than doubled in value since the start of October, which is hard to explain with anything other than sp Continue reading >>
Bitcoin Explained: What Is It, What Is It Worth, Will The Bubble Burst?
Bitcoin explained: Its history, why is it so valuable, and will the bubble burst? With one bitcoin worth $10,000, 2017 has seen this cryptocurrency go stratospheric. But what exactly is it? Bitcoin has been around since 2009, but cryptocurrencies as in, a digital currency that operates outside of a central bank have suddenly shot up in value, leaving many wondering if a solid investment could reap thousands. Recently, Bjork encouraged fans to buy her Utopia album with Bitcoin, Litecoin, Dashcoin or AudioCoin . This looks far from being a digital fad, and many who invested several years ago are on the brink of being millionaires. So heres a quick guide to the currency, why its all the rage, and whether the bitcoin bubble will burst. Bitcoin first went online in 2009 as open-source technology, invented by a mysterious, anonymous individual going by the pseudonym Satoshi Nakamoto. Its a digital currency, used to pay for items online without any additional bank charges, or government control. Companies and people can buy or sell items using bitcoin as payment. In 2017, these companies include Microsoft, Virgin Airlines, WordPress and Subway. Hard, real-life currencies such as the Pound sterling or US dollar are managed by a central bank (in this case the Bank of England and US Federal Reserve), which steadies rates and manages supply and demand. Bitcoin has no overall regulation, but it relies on the activity of miners. This is the complicated part. The currencys quantity can only be increased if it is mined a process which involves computers collecting pending bitcoin transactions and turning them into a complex mathematical equation. The first miner to solve this puzzle then chains together a block of transactions (called a blockchain), and they are then rewarded with ne Continue reading >>
How Did Bitcoin Get So Expensive?
During the economic crisis of 2008, the trust people had on the existing financial systems and the form of money was shaken. It was roughly during this period that a white paper titled Bitcoin: A Peer-to-peer Electronic Cash System was published on cryptography mailing list by a pseudo name Satoshi Nakamoto (The original white paper: ). Bitcoin was the worlds first digital, decentralised, P2P cryptocurrency and payment network. It dint require the function of a bank and relied on a trust less network. This was immediately considered by many eminent personalities as the future of Money. The gold like properties of Bitcoin made it very superior as compared to other currencies. Soon a lot of big companies started accepting payment in Bitcoin and eventually the interest level of the general public grew. The currency started getting traction and so did its price. Everybody wanted to own one and hence the price increased rapidly. Another major factor for Bitcoin price rise has been the opportunity to trade in them. Numerous exchanges started opening up that facilitated Bitcoin trading and with each new development (like banks accepting it; countries giving it a legal status - Japan Legalises Bitcoin; Price Goes through the Roof ) the price of Bitcoin skyrocketed. The current Bitcoin price at the time of writing this answer is INR 1,19,208 / USD 1,846 (Prices are taken from www.unocoin.com ) Its simple, In India gold is costlier because it's demand is more and supply is less same with the Bitcoin day by day Bitcoin popularity is increasing or demand is increasing but supply is reducing to half every four year and its demand is increasing on global basis that's why its price is high( i.e 80000inr/bitcoin) and in future more n more people will try to buy it and its price will i Continue reading >>
Why Is Bitcoin So Expensive Right Now? - Money Badger
In March of 2010, an enterprising early Bitcoin adoptee named SmokeTooMuch offered to sell 10,000 bitcoins for $50. No one took them up on their offer. At the time, Bitcoin was worth almost nothing for more than a year. No markets existed to exchange bitcoins. Few people actually knew about or used the cryptocurrency . Bitcoin existed as little more than a really cool idea and nothing more. Around May and June of the same year, the cryptocurrency became worth around 1 U.S. cent. As more people learned about the technology behind cryptocurrencies, Bitcoins value grew until it was worth one U.S. dollar in Spring of 2011. Now, Bitcoin is worth roughly $2700. SmokeTooMuchs $50 offer would be worth $27 million today. The cryptocurrency has seen rises, crashes, and everything in between. Yet in the last month, the cryptocurrency increased by a whopping $600+ in value. But how did this new currency grow so fast in such a short amount of time. Better yet, why is it currently more valuable than gold? Thanks to apps and exchanges like Coinbase , cryptocurrencies are easier to buy now than ever before.These services also increase the profile of cryptocurrencies as viable, tradable assets, not unlike other currencies and securities. With an increase in accessibility and popularity comes an increase in demand, which the current supply of bitcoins cant seem to keep up with. Bitcoin isnt the only cryptocurrency around . New rules governing Litecoin make it faster and easier to exchange. Ethereum, another popular cryptocurrency, recently split into two different currencies, raising its profile and lowering its price of entry. As Bitcoin grew in popularity, so did all cryptocurrencies, which are cheaper than 1 BTC. 3. Politics causespeople leavetraditional currencies. The U.S. election Continue reading >>
Bitcoin: What's Driving The Frenzy?
by Daniel Shane @CNNMoneyInvest December 8, 2017: 6:23 AM ET 2017 has become the year bitcoin went big. It started the year worth less than $1,000 but has soared above $17,000 . Back in 2011, it was worth less than a dollar. It is being bought and sold by investors in a frenzy, driving the price higher and higher. Some leading economists and financiers are calling bitcoin a bubble and a fraud, but industry insiders say they think it's only going to get bigger as it gains more widespread acceptance. So how does the virtual digital currency work -- and what's behind its spectacular rise? Related: Bitcoin pops above $17,000 for the first time Bitcoin ( XBT ) was created in 2009 by an unknown person using the pseudonym Satoshi Nakamoto. Many of its backers saw it as a simple global payment system for anyone to use rather than a financial asset for investors to trade. Unlike the U.S. dollar or Japanese yen, digital currencies such as bitcoin aren't issued by central banks like the Federal Reserve. Instead, they are "mined" by computers using complex algorithms. Related: Bitcoin bubble brewing or is it still a bargain? Payments in bitcoin can be made without traditional middlemen such as banks and without the need to give your name. That made bitcoin popular with criminals and others who wanted to move money anonymously. It's also been adopted by businesses around the world as a way to pay for everyday things like groceries, train tickets and haircuts. Exchanges, or marketplaces, allow people to buy or sell bitcoins using different currencies. People can send bitcoins to each other using mobile apps or their computers. It's similar to sending cash digitally, and a fee is charged for every transaction. Bitcoins are stored in a "digital wallet" a kind of virtual bank account t Continue reading >>
The Bitcoin Phenomenon: How Cryptocurrencies Gain Value
A Google search for Bitcoin returns$738.99 USD as the current value of 1 BTC. So how did Bitcoin become the biggest cryptocurrency in the world within 6 years? Initially conceived in Japan by Satoshi Nakamoto, Bitcoin was designed as an open source peer-to-peer cryptocurrency. Nakamoto designed the Bitcoin system to generate its own digital currency. Through a process called mining, users could obtain new Bitcoins in exchange for computational power. But nocurrency canbe unlimited. As more Bitcoins were procured, the mining process became exponentiallyharder. However, this did not deterred users: miners have invested millions of dollars into mining farms, facilitieshousing thousands of computers dedicated to harvesting Bitcoins. In order to explain the growth of Bitcoin, we must first establish the value of currency. By itself, cash has no intrinsic value. It is only because society as a whole accepts cash as amedium of exchange for actual goods that we place any faithinto the green papers in our wallet. Some currencies are more stable in value than others, such as the American dollar, which is constantly regulated by system such as the Federal Reserve, over nations whose currencies fluctuate in value due to unstable economies. Here we see the obvious presenceof direct-benefit effects: the American dollar sustains its value because the American people trust in its stability. Not surprisingly, Bitcoins rise in value was also driven by network effects. At its inception, Bitcoins were practically worthless due to the small community of people who used them. However, as soon as the first legitimate organization (Wikileaks) began accepting the cryptocurrency, Bitcoin experienced a surge in popularity. In the eyes of the people, these endorsements for Bitcoin indicated poten Continue reading >>
Why Bitcoin So Expensive?
Bitcoin is not expensive at all, it is just getting more valuable day by day. If we are talking about price in fiat currency then, 1 Bitcoin is equal to 1,675 Latvian Lats and the same Bitcoin is worth 13,81,57,865 Vietnamese Dong so it doesn't actually mean that it is cheap in Latvia and expensive in Vietnam. Bitcoin was nothing a few years ago but more and more people joined the rally over the years and demanded Bitcoin, Quote from: Edward50 on January 03, 2012, 06:58:19 PM 10) Last but not least, who the hell is stupid enough to pay $5.00 now for a bitcoin? Now Bitcoin is growing with a rapid growth rate and if demand continuous then the price will keep rising as per the law of demand and supply. Quote from: CisColtz on October 30, 2017, 05:04:55 PM Well bitcoin is expensive now and in my opinion we are in a big bubble ready to burst out but I doubt it will go ever lower than 3k$. You can start gather money and when you think it's the perfect price for you to jump in , do it When you look for it dollar price you might say that this is so expensive and thats all that gonna do also that looking dor its dollar price but convert it and only look for the price of bitcoin this is not much expensive mg point is we dont have to look always for its price because we all know that as the time pass by it is gtoa and grow the price is high and high. So the price will be more expensive as long as we can have something to do just to have atleast one we must gonna do it so the wag now we look for bitcoin will never too expensive. If you say bitcoin is very expensive now because now its only 6K dollars then what will you say if its rate cross 10k dollars so its better for you to invest now if you have funds which you are not afraid to loose because like every market the price of the Continue reading >>
Why Do Bitcoins Have Value?
Bitcoin was launched in 2009 as the world's first decentralized, private digital currency. Because it has no physical denominations , Bitcoin only exists inside of an interlinked computer network system. This is not entirely unique, as much of the U.S. dollar supply only exists in digital account balances instead of as actual green pieces of paper. Bitcoins are generated, or " mined ," through a sequence of complex mathematical formulas run through computers. The anonymous creator of Bitcoins set a cap on total Bitcoin volume. Once that number hits 21 million, no more Bitcoins can be generated. These digital coins can then be bought or sold with other currencies and used as an investment or money to buy goods from any sellers who accept them. Economics teaches society that values are subjective; items have economic value because people desire them for one reason or another. Currencies, or mediums of exchange, serve several different and crucial functions in an economy. For one, they make trade easier; money currencies trade for nearly any good or service. For example, suppose a person has 5 units of lumber and wishes to purchase a dog. Without currency, his only option is to find a lumber-wanting dog owner. With currency, like U.S. dollars, he can sell the lumber to anyone who wants it and then use the money to purchase a dog. Currency also provides a universal measurement for accounting purposes. For instance, without currency, it is difficult to compare companies that sell different goods. Currency is used as a store of value , which makes saving, investing and banking easier. Some currencies, like gold, have value because they are useful as a commodity. Government fiat currencies, like the U.S. dollar, have value because governments grant them legal tender status an Continue reading >>
What Makes Bitcoin Valuable?
The digital currency Bitcoin has a dedicated following, regularly makes headlines and inspires countless investors to consider making digital currency part of their portfolios. Yet it enjoys the backing of no government or third-party entity like a bank, and it can be hard to understand where its perceived value comes from. So, you may be asking, what makes bitcoin valuable? Fundamentally, bitcoins derive their value just as anything else does: because people want them. Like any other currency, bitcoin follows the basic rules of supply and demand. Currencies have always been useful tools to make trade easier, enabling holders to convert goods into a widely tradable commodity through sale, then use the proceeds of that sale to purchase nearly anything they wish. While fiat currencies derive value from the governments that back them, currencies like gold are valuable in and of themselves. Currently, bitcoin isnt like other currencies in that it is not universally accepted. There are limits on what it can be used for. While not backed by a government or valuable by themselves, bitcoins are still used as a store of value, a placeholder for the goods and services that they can be exchanged for, as with traditional currencies. Bitcoin derives its unique value from the fact that despite its lack of official backing or wide acceptance, it has generated an ecosystem in which many people are willing to trade and accept it. In fact, some perceive bitcoin to be more valuable, or more useful, than other currencies in that it is a better option for certain purposes, such as seamless digital transfers and use across borders. Also, because there is a cap set on the total number of bitcoins that will ever exist, the currency cannot be devalued through inflation as others can. Finally, Continue reading >>
Why Bitcoin Has Value
January 13, 2017, 11:17:25 AM EDT By Bitcoin Magazine We all have what feels like an intrinsic understanding of value, though it is actually learned as we come to know our world. A gold bar has value, an empty soda can, not so much. When we encounter new things its usually fairly easy to assess what kind of value they might hold, but Bitcoin is a different beast. Bitcoin is harder to define and understand, and for many beginning Bitcoiners the question of value is one of the most puzzling. So why does Bitcoin have value? To begin, we really need to understand why anything has value. Fans of post-apocalyptic fiction will often point out that in the end, the only things of real value are those that sustain and defend life. Perhaps theyre right on one level, but with the rise of civilized societies things got a bit more complex, because the things that sustain and defend those societies also gain a certain degree of value. It is in this context that all monies, Bitcoin included, gain their value. Since our societies rely heavily on trade and commerce, anything that facilitates the exchange of goods and services has some degree of value. Imagine, for example, a pre-money marketplace where the barter system is king. Perhaps youre a fisherman coming to market with the days catch and youre looking to go home with some eggs. Unfortunately for you, the chicken farmer has no use for fish at the moment, so you need to arrange a complex series of exchanges to end up with something the egg seller actually wants. Youll probably lose a percentage of your fishs value with each trade, and you also must know the exchange rate of everything with respect to everything else. What a mess. This is where money saves the day. By agreeing on one intermediate commodity, say, silver coins, two is Continue reading >>
Why Does Bitcoin Have Value And How Is The Price Determined?
Why does Bitcoin have value and how is the price determined? As a growing number of people become aware of and interested in Bitcoin --especially when the price tends to increase -- we often get asked: Many people find it difficult to grasp how something which only exists digitally can have any value at all. The answer to this question is rather simple and it lies in basic economics: scarcity, utility, supply and demand. By definition, if something is both rare (scarce) and useful (utility) it must have value and demand a specific price, with all other things being equal. Take gold, for example. Why does gold cost as much as it does? Put simply, it is relatively expensive because it is rare, hard to find and limited in supply (scarcity). Gold also has some uses to which consumers derive satisfaction from (utility). The combination of these two elements creates value by which price is determined based on the markets supply and demand. So what does this all have to do with Bitcoin? Like gold, Bitcoin is also scarce: its supply is limited. There are currently just over 16.2m Bitcoin in circulation and the maximum that will ever exist is capped at 21 million. This set cap is well known, making its scarcity transparent. However, to have value, Bitcoin must also be useful. Bitcoin creates utility in a number of ways. Like gold, Bitcoin is perfectly fungible (one Bitcoin is similar to another), it is divisible (you can pay someone a small fraction of Bitcoin, should you want to) and easily verifiable (via the Blockchain). Bitcoin is not just scarce, it also has utility Bitcoin also has other desirable properties. It is fast, borderless and decentralised with the potential to change the financial world for better. Not only does it currently have value as a payment system, but Continue reading >>
Why Did Bitcoin First Start To Gain Economic Value?
Why did Bitcoin first start to gain economic value? I am really having difficulty answering this: Why does a bitcoin have an economic value, such that there are people willing to trade US$ (or any other traditional currency) for these virtual numbers? What did the creator of Bitcoin do at the start to give it economic value? my question is more to historical perspective, about what the creator do at the first launch of bitcoin to give an incentive to people to trade their money to the bitcoin uray Mar 15 '12 at 16:16 From historical perspective, Bitcoin was worthless until Laszlo decided to give 10000BTC for one pizza. Some crazy restaurant keeper accepted the deal, and in that very moment 1BTC=pizza/10000. Then, the trust raised and also the value. Davide C Feb 25 '16 at 17:59 Allowed users to trust transactions without having to trust any single entity. Opened it up so that anyone could participate and exchange computation power for Bitcoins. Is designing with a fixed size (21 million Bitcoins), he created an incentive for users to get involved early while Bitcoins are relatively cheap to generate; there is less risk of future inflation reducing the value of early adopters. Bitcoins have value because they are useful. They have useful properties. As for what the author wrote in the very beginning, you can read the announcement of Bitcoin v0.1 . Bitcoin was worth very little for the first year. In this thread , written 16 months after Bitcoin's launch, you can read the conversation leading up to a guy buying 2 large pizzas for 10,000 BTC. I want to downvote this because it doesn't really answer my (or OP's) actual question - how did Bitcoin start to become valuable? The answer may be somewhere in the links, but it would be great to see it here. On the other hand, the Continue reading >>
Why Is Bitcoin So Valuable?
The price of bitcoin has soared from a mere $759 a year ago to an astounding $11,760 today. Naturally, many are left scratching their heads. Why is bitcoin so valuable? In what follows, I consider two common views before offering my own. Many in the bitcoin community claim that bitcoin is valuable because it is costly to produce. Each bitcoin represents the computing power used to produce it, they say. Computing power is valuable. Therefore, bitcoin is valuable, too. Is that right? There is a grain of truth there. But, ultimately, this explanation doesn't work. Let's start with what is correct: it is costly to produce bitcoin. Bitcoin is a distributed ledger technology. The blockchain, or ledger, at bitcoin's core must be updated when a transaction is made. If you buy a burger with bitcoin, your account has to be debited and the diner's account credited. To accomplish this without relying on a central clearinghouse, all of the computers running the protocol race to complete a complicated computing problem that processes the transactionor, more precisely, a block of transactions. Of course, it is costly to solve this computing problem. To encourage folks to incur those costs, the first computer to solve the problem is rewarded with new bitcoinbitcoin that no one owned previously. Thats mining. You run the program and, with some luck, acquire some new bitcoin. So, where does this explanation go wrong? Basically, it gets the causation backwards. It is true that individuals incur costs to mine bitcoin. But that doesnt make bitcoin valuable. Rather, individuals choose to incur the costs of mining because bitcoin is valuable. Think of it like this: no one digs for gold in my backyard. Why? It is costly to dig for gold and, presumably, they do not believe the gold they could Continue reading >>